LKQ Corp (LKQ) 2024 Q3 法說會逐字稿

Good morning, everyone, and welcome to the LKQ Corporation's third quarter 2024 earnings call. My name is Lydia and will be your operator today. (Operator Instructions)

大家早安，歡迎參加 LKQ Corporation 2024 年第三季財報電話會議。我叫莉迪亞，今天將擔任您的接線生。（操作員說明）

I'll now hand you over to Joseph Boutross, Vice President, Investor Relations. To begin, please go ahead.

現在我將把您交給投資者關係副總裁 Joseph Boutross。首先，請繼續。

Thank you, operator. Good morning, everyone, and welcome to LKQ's third quarter 2024 earnings conference call. With us today are Justin Jude, LKQ's President and Chief Executive Officer; and Rick Galloway, Senior Vice President and Chief Financial Officer. Please refer to the LKQ website at lkqcorp.com for our earnings release issued this morning as well as the accompanying slide presentation for this call.

謝謝你，接線生。大家早安，歡迎參加 LKQ 2024 年第三季財報電話會議。今天與我們在一起的有 LKQ 總裁兼執行長 Justin Jude；以及資深副總裁兼財務長 Rick Galloway。請參閱 LKQ 網站 lkqcorp.com，以了解我們今天早上發布的收益報告以及本次電話會議隨附的幻燈片簡報。

Now let me quickly cover the safe harbor. Some of the statements that we make today may be considered forward-looking. These include statements regarding our expectations, beliefs, hopes, intentions or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statements. For more information, please refer to the risk factors discussed in our Form 10-K and subsequent reports filed with the SEC.

現在讓我快速覆蓋安全港。我們今天發表的一些聲明可能被認為是前瞻性的。其中包括有關我們的期望、信念、希望、意圖或策略的聲明。由於各種因素，實際事件或結果可能與前瞻性聲明中明示或暗示的事件或結果有重大差異。我們不承擔更新任何前瞻性陳述的義務。如需了解更多信息，請參閱我們的 10-K 表格以及隨後向 SEC 提交的報告中討論的風險因素。

During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release and slide presentation. Hopefully, everyone has had a chance to look at our 8-K, which we filed with the SEC earlier today. And as normal, we are planning to file our 10-Q in the coming days.

在本次電話會議中，我們將介紹 GAAP 和非 GAAP 財務指標。今天的收益新聞稿和投影片簡報中包含了公認會計準則與非公認會計準則衡量標準的調節。希望每個人都有機會查看我們今天早些時候向 SEC 提交的 8-K。像往常一樣，我們計劃在未來幾天內提交 10-Q。

And with that, I'm happy to turn the call over to our CEO, Justin Jude.

至此，我很高興將電話轉給我們的執行長賈斯汀·裘德。

Thank you, Joe, and good morning to everyone joining us on the call. I want to start by saying that our thoughts and prayers are with all of those that have been affected by the hurricanes Helene and Milton. The Southeast, in particular, is one of LKQ's strongest regions, which is a testament to our many dedicated employees and long-standing relationships with our customers in the region. We are grateful to report no fatalities among our LKQ team members, but property damage and disruption to daily life have affected many.

謝謝你，喬，祝所有加入我們電話的人早安。首先我想說，我們的思念和祈禱與所有受到颶風海倫和米爾頓影響的人們同在。尤其是東南部，是 LKQ 最強大的地區之一，證明了我們擁有眾多敬業的員工以及與該地區客戶的長期關係。我們很高興地報告 LKQ 團隊成員沒有死亡，但財產損失和日常生活中斷影響了許多人。

At LKQ, we pride ourselves on being a good corporate citizen and partnering with the communities in which we operate. In response to the hurricanes, we have earmarked funds to cover requests into our Employee Assistance Fund for financial relief, and reached out to our employees for recommendations of local causes that could use our help. We also have made donations to charitable organizations involved with the disaster response efforts.

在 LKQ，我們為成為優秀的企業公民並與我們經營所在的社區合作而感到自豪。為了應對颶風，我們已撥出專款來滿足員工援助基金的經濟救濟請求，並向員工尋求關於需要我們幫助的當地事業的建議。我們也向參與救災工作的慈善組織捐款。

I would also like to thank the LKQ team members who jumped into action to aid their colleagues and communities. While there are too many individuals to name, I am truly inspired by their efforts to gather and deliver supplies to those in need and assist in the cleanup. As the region begins its recovery period, LKQ stands ready to continue to provide support.

我還要感謝 LKQ 團隊成員，他們立即採取行動幫助同事和社區。雖然有太多人無法一一列舉，但他們為有需要的人收集和運送物資以及協助清理工作所做的努力確實讓我深受鼓舞。隨著該地區開始復甦期，LKQ 隨時準備好繼續提供支援。

Shifting now to the quarter. Last month, we held an Investor Day, where I laid out my management style and priorities. As a reminder, I stated that my priorities would focus on operational excellence and maximizing total shareholder return.

現在轉到季度。上個月，我們舉辦了投資者日，我在會議中闡述了我的管理風格和優先事項。作為提醒，我表示我的首要任務將集中在卓越營運和股東總回報最大化。

In the third quarter, we evidenced this focus by taking action to simplify, integrate and rationalize the business while returning value to our stakeholders. Let's start with the capital allocation and shareholder returns.

在第三季度，我們透過採取行動簡化、整合和合理化業務，同時向利害關係人回報價值，證明了這一重點。讓我們從資本配置和股東回報開始。

At recent trading levels, we believe the best use of our capital is repurchasing our shares. We were active in the quarter, repurchasing 3 million shares for approximately $125 million. With $800 million left on our authorization and plans to remain active in the market in the coming years, I am pleased to announce our Board of Directors approved a resolution to increase the authorization amount under our share repurchase program by an additional $1 billion with an extension through October 2026.

在最近的交易水準上，我們認為資本的最佳用途是回購我們的股票。我們在本季表現活躍，以約 1.25 億美元的價格回購了 300 萬股股票。我們的授權還剩8 億美元，並計劃在未來幾年繼續活躍在市場上，我很高興地宣布，我們的董事會批准了一項決議，將我們的股票回購計劃下的授權金額再增加10億美元，並延至 2026 年 10 月。

Management's recommendation to increase and extend the authorization and the Board's approval thereof is evidence of our confidence in LKQ's future and our ability to generate robust free cash flow. In August, we paid a quarterly dividend totaling $79 million, and our Board approved a quarterly cash dividend of $0.30 per share to be paid in November.

管理層增加和延長授權的建議以及董事會的批准證明了我們對 LKQ 未來的信心以及我們產生強勁自由現金流的能力。8 月份，我們支付了總計 7,900 萬美元的季度股息，董事會批准了 11 月份支付每股 0.30 美元的季度現金股息。

Moving to our operational excellence initiatives. The simplification of our portfolio and operations is a key pillar to drive better returns. As part of our portfolio review, we completed the sale of our Poland operation to Mekonomen in July, and recently finalized the sale of our Bosnia business. Additionally, we have another small transaction nearing completion in the coming weeks. Now while this transaction is a very small component of our North American operation, the sale will eliminate a loss-making business while freeing up management's time.

轉向我們的卓越營運計劃。我們的投資組合和營運的簡化是推動更好回報的關鍵支柱。作為我們投資組合審查的一部分，我們於 7 月完成了將波蘭業務出售給 Mekonomen，並於最近完成了波斯尼亞業務的出售。此外，我們還有另一筆小額交易即將在未來幾週內完成。現在，雖然這項交易只是我們北美業務的一小部分，但此次出售將消除虧損業務，同時釋放管理層的時間。

On the integration front, we continue to work on merging our recent acquisitions into existing LKQ operations. While most of the heavy lifting is done on Uni-Select's footprint rationalization, the teams are identifying additional efficiencies and have selected 7 more locations for closure.

在整合方面，我們持續致力於將最近的收購合併到現有的 LKQ 業務中。雖然大部分繁重工作是在 Uni-Select 的佔地面積合理化方面完成的，但團隊正在尋找額外的效率，並選擇了另外 7 個地點進行關閉。

Andy Hamilton talked about the SKU rationalization effort in Europe, and I'm pleased to report the team pushed this project forward in the quarter and now reviewed over 25 product groups, representing 425,000 SKUs or more than 50% of our project scope.

Andy Hamilton 談到了歐洲的 SKU 合理化工作，我很高興地報告團隊在本季度推動了該項目，現在審查了超過 25 個產品組，代表 425,000 個 SKU 或超過我們項目範圍的 50%。

Also in Europe, we are working on restructuring activities to reduce costs and increase efficiencies related to our logistics network. We will have more details on these efforts in 2025.

同樣在歐洲，我們正在進行重組活動，以降低與物流網絡相關的成本並提高效率。我們將於 2025 年提供有關這些努力的更多詳細資訊。

And lastly, our Specialty business recently completed the combining of 2 warehouses near [ Dallas, ] a legacy facility and a facility we acquired as part of a 2023 transaction into a new, more efficient single location.

最後，我們的專業業務最近完成了將 [ 達拉斯 ] 附近的 2 個倉庫（一個遺留設施和我們作為 2023 年交易的一部分收購的一個設施）合併到一個新的、更高效的單一地點。

Our commitment to lean operating culture is critically important especially in a period when the top line is facing headwinds. In addition to the substantial cost actions we have already taken this year, all of our businesses are undertaking another review of the cost structures as part of our annual budget process. Additionally, we are conducting a benchmark study on our overhead cost to determine where we have opportunities to be more productive and cost effective.

我們對精實營運文化的承諾至關重要，尤其是在營收面臨逆風的時期。除了我們今年已經採取的大量成本行動之外，我們所有的企業都在對成本結構進行另一次審查，作為我們年度預算流程的一部分。此外，我們正在對間接費用進行基準研究，以確定我們在哪些方面有機會提高生產力和成本效益。

Growth is our final operational excellence pillar and we strive to grow organic revenue and increase operating margins. We were not wholly successful in this regard during the third quarter as many of the economic and industry headwinds we faced in the first half of 2024 continued to have a negative impact on our results. While parts and services revenue was down roughly 4% organically on a per day basis, there were some positives to take away.

成長是我們卓越營運的最終支柱，我們努力增加有機收入並提高營運利潤率。第三季我們在這方面並未完全成功，因為我們在 2024 年上半年面臨的許多經濟和產業阻力持續對我們的業績產生負面影響。雖然零件和服務收入每天有機下降約 4%，但也有一些積極的因素可以消除。

North America declined 7.5% on a per-day basis, but aftermarket down to a greater extent than salvage. Q3 extended the trend of year-over-year repairable claims decreases, with claims falling 9.5% following a [7.0%] drop in the second quarter.

北美地區每日下跌 7.5%，但售後市場下跌幅度大於報廢市場。第三季延續了可修復索賠年減的趨勢，繼第二季下降 [7.0%] 後，索賠下降了 9.5%。

Our collision volumes were down only 6%, showing that despite the drop in claims, we did not lose share. We believe the decrease in claims are still tied to the economic factors we discussed last quarter such as the rising insurance premiums and the decrease in used car pricing. While we anticipated claims volumes would not rebound quickly in the second half, the Q3 decrease was higher than we projected and it contributed to an underperformance of revenue relative to guidance.

我們的碰撞事故量僅下降了 6%，這表明儘管索賠數量有所下降，但我們的市場份額並未下降。我們認為索賠的減少仍然與我們上季度討論的經濟因素有關，例如保險費上漲和二手車價格下降。雖然我們預計下半年的索賠量不會迅速反彈，但第三季的降幅高於我們的預期，這導致收入相對於指引表現不佳。

The Q3 claims figures suggest the possibility of a longer recovery period than we previously thought. And we are working through this evaluation with our strategy and operations teams as part of our 2025 budget process.

第三季的索賠數據表明，恢復期可能比我們之前想像的要長。作為 2025 年預算流程的一部分，我們正在與我們的策略和營運團隊一起進行此項評估。

Europe's revenue was flat on a per day basis, but was an improvement from the 1.3% decrease we reported in the second quarter. Certain markets showed single-digit growth, while others declined in a similar range. Economic conditions remained challenging across most markets in Europe, notably in Germany and the U.K. Competition is also contributing to the challenging condition as consistent with last quarter, some of the smaller players are aggressively pushing price.

歐洲的每日收入持平，但較我們第二季報告的 1.3% 的下降有所改善。某些市場呈現個位數成長，而其他市場則出現類似幅度的下降。歐洲大多數市場的經濟狀況仍然充滿挑戰，特別是在德國和英國。

The North American revenue decline of 7.5% per day was larger than what we reported in the first two quarters. The sequential change is attributable to recurrable claims in Q3 and the mix impact of incremental paint revenue in the organic calculation. We passed the one year mark since the Uni-Select acquisition on August 1, 2024. And as a result, the FinishMaster revenue became part of the organic calculation for part of Q3. Organic paint revenue was down by a greater percentage than the segment as a whole, resulting from softness in FinishMaster's direct sales.

北美地區每天的營收下降 7.5%，比我們前兩季的報告還要大。連續變化是由於第三季的重複索賠以及有機計算中油漆收入增量的綜合影響。自 2024 年 8 月 1 日收購 Uni-Select 以來，我們已經過去一周年了。因此，FinishMaster 營收成為第三季部分有機計算的一部分。由於 FinishMaster 直接銷售的疲軟，有機塗料收入的下降幅度高於整個細分市場。

There were some revenue loss post acquisition as customers reevaluated their supplier situation and sales reps left to join competitors. As we integrated the business and aligned our sales teams, we believe the situation has stabilized and the team is working to win back business with LKQ's combination of superior availability and service.

由於客戶重新評估其供應商狀況以及銷售代表加入競爭對手，收購後出現了一些收入損失。隨著我們整合業務並調整我們的銷售團隊，我們相信情況已經穩定下來，團隊正在努力透過 LKQ 卓越的可用性和服務的結合來贏回業務。

Specialty took a step backward in the third quarter, with organic revenue down 10% on a per day basis compared to 2% in the first half. Economic conditions, including higher interest rates and relatively low consumer confidence having contributed to lower vehicle and RV sales, thus creating a significant headwind for our parts sales. We expect the challenging conditions to continue through the fourth quarter.

Specialty 在第三季倒退了一步，每天的自然收入下降了 10%，而上半年為 2%。經濟狀況，包括較高的利率和相對較低的消費者信心，導致汽車和房車銷量下降，從而為我們的零件銷售帶來了巨大的阻力。我們預計充滿挑戰的情況將持續到第四季。

Shifting to our profitability measures. Adjusted diluted earnings per share increased by 2% compared to Q3 last year, and the segment EBITDA margin improved by 30 basis points. Rick will provide further details on these numbers in his remarks.

轉向我們的獲利能力指標。調整後攤薄每股收益較去年第三季成長 2%，該部門 EBITDA 利潤率提高 30 個基點。里克將在演講中提供有關這些數字的更多詳細資訊。

Before turning the call to Rick, I want to mention a few noteworthy items for the quarter. Hurricanes Helene and Milton have affected our operations in North America as some of our locations and many of our customers were shut down as a result of the storms and the after effects.

在打電話給 Rick 之前，我想提一下本季的一些值得注意的事項。颶風海倫和米爾頓影響了我們在北美的業務，因為風暴及其後果導致我們的一些地點和許多客戶關閉。

To give an idea of the impact on LKQ's operations, Helene forced four closures of nearly 25% of our locations in the Southeast and these locations were down between one and six days. Milton forced closures of nearly 75% of our order locations are between one and four days. Thankfully, we didn't incur any significant property damage, so the impact will be mostly related to lost revenue.

為了了解這對 LKQ 營運的影響，Helene 強制關閉了我們東南部近 25% 的門市四次，這些門市的關閉時間為一到六天。Milton 近 75% 的訂單地點被迫關閉一到四天。值得慶幸的是，我們沒有遭受任何重大財產損失，因此影響主要與收入損失有關。

Earlier this month, dock workers on the East and Gulf Coast went to strike for three days. A tentative agreement got them back to work as negotiations continue on a final contract. We expect the strike days to have an impact on our inventory as each day off is estimated to require a week to catch up.

本月早些時候，東部和墨西哥灣沿岸的碼頭工人舉行了為期三天的罷工。隨著最終合約的談判繼續進行，臨時協議讓他們重新開始工作。我們預計罷工日會對我們的庫存產生影響，因為預計每個休息日都需要一周的時間才能趕上。

We were already experiencing delays for shipments brought into the East Coast. And while we believe our current inventory levels are adequate to support the business, there could be some minor impacts to our fill rates over the coming months. We are also contingency planning in case of final contract isn't agreed to by January.

我們已經遇到了運往東海岸的貨物延誤的情況。雖然我們相信我們目前的庫存水準足以支持業務，但未來幾個月我們的填充率可能會受到一些輕微影響。我們也正在製定應急計劃，以防一月份之前未能就最終合約達成協議。

Last quarter, we reported that we reached an agreement with the trade union, representing a number of our employees in Germany, and we are pleased with the progress in restoring normal operating performance, and branch availability improved in the quarter, rising to nearly 95%.

上季度，我們報告稱，我們與代表德國部分員工的工會達成了協議，我們對恢復正常營運業績所取得的進展感到高興，本季度分支機構可用性有所改善，升至近 95% 。

I'll now turn the call to Rick for a review of the financials and guidance.

我現在將打電話給里克，請他審查財務和指導。

Thank you, Justin, and welcome to everyone joining us today. Third quarter results reflect solid overall performance, but with some variability across the business. Europe performed well in the face of challenging macroeconomic conditions, while revenue in our North America and Specialty segments came in lower than expected due to factors mentioned by Justin.

謝謝賈斯汀，歡迎大家今天加入我們。第三季業績反映了整體業績穩健，但整個業務存在一些變化。面對充滿挑戰的宏觀經濟狀況，歐洲表現良好，而由於賈斯汀提到的因素，我們的北美和特種業務部門的收入低於預期。

As discussed during the Investor Day, we were experiencing softer-than-anticipated revenue in North America in July and August numbers. This softness continued into September with preliminary repairable claims data indicating a larger-than-expected decrease in total Q3 year-over-year repairable claims. Additionally, Hurricane Helene had a small but negative impact on the final week of the quarter.

正如投資者日期間討論的那樣，我們在北美 7 月和 8 月的收入數據低於預期。這種疲軟狀態持續到了 9 月份，初步可修復索賠數據顯示，第三季可修復索賠總額年減幅度大於預期。此外，颶風海倫對該季度最後一周產生了微小但負面的影響。

These challenging economic conditions, including further declines in collision claims from Q2 to Q3 were difficult to overcome, but we are proud of all of our 48,000 employees who remain focused on delivering solid operating performance through our lean operating model.

這些充滿挑戰的經濟狀況，包括從第二季度到第三季度碰撞索賠的進一步下降，是很難克服的，但我們為我們所有48,000 名員工感到自豪，他們仍然專注於透過我們的精益運營模式提供穩健的營運績效。

Turning now to the third quarter consolidated results. Our actions to simplify the business and align cost structures to demand levels contributed to improvement in our segment EBITDA margins by 30 basis points year-over-year. Adjusted diluted earnings per share of $0.88 was $0.02 higher than the prior year figure.

現在轉向第三季綜合業績。我們簡化業務並使成本結構與需求水準保持一致的行動使我們的部門 EBITDA 利潤率比去年同期提高了 30 個基點。調整後攤薄每股收益為 0.88 美元，比去年同期高出 0.02 美元。

Lower share count due to our ongoing share repurchase program and lower taxes contributed to a year-over-year improvement in adjusted EPS of approximately $0.04. These were offset by roughly $0.02 of a net decline in operating results. We saw significant improvements in EBITDA in both our Europe and Self-service segments.

由於我們正在進行的股票回購計劃和較低的稅收，導致股票數量減少，調整後每股收益比去年同期提高約 0.04 美元。這些被經營業績淨下降約 0.02 美元所抵消。我們看到歐洲和自助服務領域的 EBITDA 顯著改善。

Europe posted double-digit EBITDA margins for the second straight quarter despite a challenging macroeconomic environment. Self-service benefited from their focus on improved vehicle procurement costs and productivity with some additional help from more favorable movements in scrap steel prices during the quarter.

儘管宏觀經濟環境充滿挑戰，歐洲的 EBITDA 利潤率連續第二季實現兩位數。自助服務受益於他們對提高車輛採購成本和生產力的關注，以及本季廢鋼價格更有利的變動帶來的額外幫助。

However, organic revenue declines in North America, driven largely by aftermarket and paint volumes, contributed to a mix decrease and ultimately lower EBITDA for the North America segment. Difficult economic conditions in the auto and RV markets also led to a decline in organic revenue and earnings in our Specialty segment.

然而，北美地區的有機收入下降，主要是由售後市場和油漆銷售推動，導致北美市場的組合下降，並最終降低了 EBITDA。汽車和房車市場困難的經濟狀況也導致我們專業部門的有機收入和收益下降。

As noted in Q1, we implemented a global restructuring program focused on enhancing profitability. In Q3, we expanded the 2024 restructuring plan to simplify the business and to align with current demand, including additional footprint rationalization and streamlining our logistics models.

如第一季所述，我們實施了一項專注於提高獲利能力的全球重組計劃。第三季度，我們擴大了 2024 年重組計劃，以簡化業務並滿足當前需求，包括進一步合理化佔地面積和簡化我們的物流模式。

Given the persistent market demand pressures and macroeconomic challenges, we are continuing to execute on our restructuring plans in North America and Europe to reduce head count and exit underperforming locations. As a result, we incurred $14 million in charges for the quarter. Further charges are expected in future periods for severance, lease termination costs and other related expenses.

鑑於持續的市場需求壓力和宏觀經濟挑戰，我們將繼續執行北美和歐洲的重組計劃，以減少員工數量並退出表現不佳的地區。因此，本季我們產生了 1,400 萬美元的費用。預計未來期間將收取更多遣散費、租賃終止費用和其他相關費用。

Now for segment results. Going to slide 8. North America posted a segment EBITDA margin of 16.1%, a 90 basis points decrease relative to last year. Last quarter, we projected the full year margin would be around 17%, with the full year impact of Uni-Select dilution.

現在來看分段結果。轉到投影片 8。北美分部 EBITDA 利潤率為 16.1%，較去年下降 90 個基點。上季度，我們預計全年利潤率將在 17% 左右，考慮到 Uni-Select 稀釋對全年的影響。

The reported margin for the third quarter was below our expectations as the cost actions taken, including Uni-Select synergies from integration and other restructuring efforts were not enough to offset the lower aftermarket revenue with the related mix effect on gross margins as aftermarket collision revenue has a higher margin than our other wholesale product lines.

第三季報告的利潤率低於我們的預期，因為採取的成本行動（包括Uni-Select 整合和其他重組工作的協同效應）不足以抵消售後市場收入的下降以及售後市場碰撞收入對毛利率的相關混合影響。

Relative to the prior year, salvage margins were also down, reflecting more favorable revenue, vehicle cost trends and commodity prices in the prior year period. Overhead expenses decreased 90 basis points in North America, reflecting lower personnel costs, primarily related to incentive compensation, with the Uni-Select synergies and productivity initiatives largely off-setting significant inflationary pressures and the leverage effect of the organic revenue decline. With the headwinds on repairable claims and salvage margins as well as the impact from the hurricanes, we estimate North America's EBITDA margins will be in the low to mid-16's for the full year.

與前一年相比，報廢利潤率也有所下降，反映出去年同期的收入、車輛成本趨勢和商品價格更為有利。北美的管理費用下降了90 個基點，反映出人員成本降低（主要與激勵性薪酬相關），Uni-Select 的協同效應和生產力舉措在很大程度上抵消了顯著的通膨壓力和有機收入下降的槓桿效應。由於可修復索賠和救助利潤方面的不利因素以及颶風的影響，我們估計北美地區全年的 EBITDA 利潤率將在 16% 左右。

Looking at slide 9. Europe reported a segment EBITDA margin of 10.2%, a 90 basis points improvement over last year. Gross margin rose slightly despite the difficult economic conditions as we were able to pass along some pricing to help offset input cost increases in certain markets. Overhead expenses were favorable by 70 basis points compared to the prior year period.

看投影片 9。歐洲業務的 EBITDA 利潤率為 10.2%，比去年提高了 90 個基點。儘管經濟狀況困難，毛利率仍略有上升，因為我們能夠傳遞一些定價來幫助抵消某些市場的投入成本增加。管理費用較去年同期有利 70 個基點。

While productivity measures largely offset inflationary pressures, our prior year SG&A expenses included a 70 basis points charge related to a nonrecurring value-added tax audit matter in Italy. We remain focused on productivity measures to offset the ongoing inflationary pressures on overhead expenses and cost of goods sold, and have expanded the 2024 restructuring plan in Europe to support these efforts.

雖然生產力指標在很大程度上抵消了通膨壓力，但我們上一年的 SG&A 費用包括與義大利非經常性增值稅審計事項相關的 70 個基點費用。我們仍然專注於生產力措施，以抵消管理費用和銷售商品成本方面持續存在的通膨壓力，並擴大了歐洲 2024 年重組計劃以支持這些努力。

Many of these actions have been initiated and are in process, but the benefits will be more notable in the fourth quarter and heading into 2025. When we talked 90 days ago, we expected EBITDA margins in Europe to be in the mid- to high-nine's. With current volume expectations and the actions we've taken to address productivity, we believe EBITDA margins will fall in line with this range. On a long-term basis, we expect to deliver double-digit EBITDA margins in Europe.

其中許多行動已經啟動並正在進行中，但其效益將在第四季度和進入 2025 年時更加顯著。當我們 90 天前討論時，我們預計歐洲的 EBITDA 利潤率將在 9% 左右。根據目前的銷售預期以及我們為解決生產力問題所採取的行動，我們相信 EBITDA 利潤率將與此範圍保持一致。從長遠來看，我們預計在歐洲實現兩位數的 EBITDA 利潤率。

Moving to slide 10. Specialty's EBITDA margin of 7.3% declined 130 basis points compared to the prior year, primarily driven by a decline in organic revenue and resulting leverage effect on overhead costs. Demand softness in the auto and RV product lines and competitive pricing pressures remain challenges for the business.

轉到投影片 10。Specialty 的 EBITDA 利潤率為 7.3%，與前一年相比下降了 130 個基點，這主要是由於有機收入下降以及由此產生的間接費用槓桿效應所致。汽車和房車產品線的需求疲軟以及競爭性的定價壓力仍然是該業務面臨的挑戰。

We have been implementing changes to improve our net pricing and saw sequential quarterly improvement in gross margin in the last three quarters. Overhead expenses were roughly flat in dollar terms, but were higher as a percentage of revenue, primarily due to lower operating leverage on the organic revenue decline. We believe the full year segment EBITDA margin will be closer to 7%, given the continued organic revenue declines.

我們一直在實施變革以提高淨定價，並在過去三個季度中毛利率逐季度有所改善。以美元計算，管理費用大致持平，但佔收入的百分比較高，這主要是由於有機收入下降導致營運槓桿降低。鑑於有機收入持續下降，我們認為全年部門 EBITDA 利潤率將接近 7%。

Self-service generated a 7.3% segment EBITDA margin in Q3, which is an almost 800 basis point improvement from last year. In dollar terms, segment EBITDA increased by $11 million. Efforts to manage vehicle procurement costs, combined with overhead cost controls and favorable movements in scrap steel prices helped drive an improvement in profitability.

第三季度，自助服務部門 EBITDA 利潤率為 7.3%，比去年提高了近 800 個基點。以美元計算，該部門 EBITDA 增加了 1,100 萬美元。管理車輛採購成本的努力，加上間接成本控制和廢鋼價格的有利變動，有助於推動獲利能力的提升。

Shifting to cash flows and the balance sheet. We produced $341 million in free cash flow during the quarter, bringing our year-to-date total to $661 million. We invested approximately $16 million in 2 small tuck-in acquisitions, including one in Canada and one in Europe. In addition, we paid down approximately $35 million in outstanding debt.

轉向現金流和資產負債表。本季我們產生了 3.41 億美元的自由現金流，使年初至今的自由現金流總額達到 6.61 億美元。我們投資了約 1,600 萬美元進行了 2 項小型收購，其中一項在加拿大，一項在歐洲。此外，我們還清了約 3,500 萬美元的未償債務。

In the third quarter, we continued to return value to our shareholders with $125 million for share repurchases and our quarterly dividend totaling $79 million. We will also continue with our $0.30 per share quarterly dividend into 2025. At this level, the dividend payout aligns with our stated capital allocation policy and allows us to retain strategic flexibility for capital allocation.

第三季度，我們持續向股東回報價值，回購股份達 1.25 億美元，季度股利總額達 7,900 萬美元。我們也將繼續派發每股 0.30 美元的季度股息，直至 2025 年。在這個水準上，股利支付符合我們既定的資本配置政策，並使我們能夠保留資本配置的策略彈性。

We are committed to allocating at least 50% of our free cash flow towards dividends and share repurchases, and our third quarter activity kept us on pace to deliver on this commitment. On a year-to-date basis, we have generated free cash flow of $661 million and invested $520 million for share repurchases and dividends or almost 80% of our free cash flow.

我們致力於將至少 50% 的自由現金流用於股息和股票回購，第三季的活動使我們能夠繼續履行這項承諾。今年迄今，我們產生了 6.61 億美元的自由現金流，並投資了 5.2 億美元用於股票回購和股息，幾乎占我們自由現金流的 80%。

As of September 30, we had total debt of $4.4 billion with a total leverage ratio of 2.4 times EBITDA, a slight increase from the prior quarter, but within a range of expectations. We remain committed to maintaining a manageable debt level and our investment-grade rating.

截至 9 月 30 日，我們的總債務為 44 億美元，總槓桿率為 EBITDA 的 2.4 倍，較上一季略有增加，但在預期範圍內。我們仍然致力於維持可控的債務水準和投資等級。

Our effective borrowing cost was 5.5% at the end of Q3, slightly down from Q2 as a result of recently lowered benchmark rates. We have $1.7 billion in variable rate debt, of which $700 million has been fixed with interest rate swaps, which effectively provides a fixed rate on over 75% of our debt.

由於近期基準利率下調，第三季末我們的有效借貸成本為 5.5%，較第二季略有下降。我們有 17 億美元的浮動利率債務，其中 7 億美元透過利率掉期固定，這實際上為我們超過 75% 的債務提供了固定利率。

I will close with an update on our full year 2024 guidance. We expected in our prior guidance the drop in repairable claims volumes in North America would remain at the same level of year-over-year decline into the back half of the year. Given the greater-than-anticipated drop in the third quarter weighing down organic revenue, combined with lower-than-expected volumes in our Specialty business and headwinds from hurricanes in the southeastern portion of the US, we are adjusting our full year guidance.

最後，我將介紹 2024 年全年指導的最新情況。我們在先前的指引中預計，到今年下半年，北美可修復索賠數量的下降將保持與去年同期下降相同的水平。鑑於第三季的降幅超出預期，拖累了有機收入，再加上我們的特種業務銷售低於預期以及美國東南部颶風的不利影響，我們正在調整全年指引。

As mentioned previously, we view the market-driven volume declines will abate, but expect them to impact us in the fourth quarter and eventually level off in 2025. While we have taken action to mitigate these effects through cost controls and margin actions, those will not be enough to offset the full year impact of the lower revenue expectations.

如前所述，我們認為市場驅動的銷售下降將會減弱，但預計它們將在第四季度影響我們，並最終在 2025 年趨於平穩。雖然我們已採取行動透過成本控制和利潤率行動來減輕這些影響，但這些不足以抵消收入預期下降對全年的影響。

Our guidance is based on current market conditions and recent trends and assumes that scrap and precious metal prices hold near September prices. On foreign exchange, our guidance includes rates roughly in line with the third quarter. The global tax rate edged up slightly to 27.0% due to shifts in our geographical mix of earnings.

我們的指導基於當前市場狀況和近期趨勢，並假設廢鋼和貴金屬價格保持在 9 月價格附近。在外匯方面，我們的指導包括與第三季大致一致的利率。由於我們收入的地理結構發生變化，全球稅率小幅上升至 27.0%。

Our full year guidance metrics on slide 12 have been updated from Q2 earnings call. We expect reported organic parts and services revenue in the range of negative 275 basis points to negative 175 basis points. At the negative 2.25% midpoint, this is a decrease of 175 basis points from the prior guidance.

我們投影片 12 上的全年指引已根據第二季財報電話會議進行了更新。我們預計報告的有機零件和服務收入將在負 275 個基點至負 175 個基點之間。以負 2.25% 的中點計算，這比之前的指導值下降了 175 個基點。

The continued softness in Q3 organic revenue in North America and Specialty, along with the impact of the hurricanes in the US, drove the decision to lower the full year range. We expect the top line headwinds in North America will linger into 2025. We are working through our budgeting process for next year, and we'll update you on the expectations during our Q4 earnings release in February.

北美和特種產品第三季有機收入持續疲軟，加上美國颶風的影響，促使我們決定降低全年範圍。我們預計北美的收入逆風將持續到 2025 年。我們正在製定明年的預算流程，我們將在二月發布第四季度收益時向您通報最新的預期。

In Europe, the top line recovery from the difficult economic environment in several markets is slower than originally anticipated, and we expect Q4 organic growth to be similar to what we saw in Q3. As a result of these headwinds, we expect adjusted diluted EPS to be slightly lower and in the range of $3.38 to $3.52, a decrease of $0.15 from our previous midpoint. The primary driver of the decrease includes the market-driven demand dynamics in North America and Specialty.

在歐洲，一些市場從困難的經濟環境中恢復的收入比最初預期的要慢，我們預計第四季的有機成長將與第三季相似。由於這些不利因素，我們預計調整後攤薄每股收益將略低，在 3.38 美元至 3.52 美元之間，比我們之前的中點減少 0.15 美元。下降的主要驅動因素包括北美和特種市場驅動的需求動態。

While we expect to see volatility in these revenue trends, the team is focusing on addressing those items within our control including our cost structure, and we'll continue to execute on productivity and restructuring initiatives, which will partially offset these revenue trends in Q4 and will further benefit us heading into 2025.

雖然我們預計這些收入趨勢會出現波動，但團隊正在專注於解決我們控制範圍內的這些項目，包括我們的成本結構，我們將繼續執行生產力和重組計劃，這將部分抵消第四季度和第四季度的這些收入趨勢。

The free cash flow targets of 50% to 60% annual EBITDA conversion and approximately $850 million remain unchanged from prior guidance. Diligent balance sheet and capital expenditure management will help deliver the full year target despite the lower expected profitability while continuing to balance trade working capital needs heading into 2025.

年度 EBITDA 轉換率達到 50% 至 60% 的自由現金流目標以及約 8.5 億美元與先前的指導保持不變。儘管預期獲利能力較低，但勤奮的資產負債表和資本支出管理將有助於實現全年目標，同時繼續平衡 2025 年的貿易營運資本需求。

Thanks for your time. I will now turn the call back to Justin for his closing comments.

感謝您抽出時間。我現在將把電話轉回給賈斯汀，聽取他的結束語。

Thanks, Rick, for the financial commentary. As I close the book on my first quarter as CEO, I want to thank all of my LKQ colleagues for what they do each and every day to make LKQ an exceptional company. Things don't always go according to plan, and Q3 threw us a few curve balls, but the LKQ team immediately went to work addressing these issues.

謝謝里克的財務評論。在我作為執行長的第一個季度結束這本書時，我要感謝所有 LKQ 同事每天所做的工作，使 LKQ 成為一家卓越的公司。事情並不總是按計劃進行，Q3 為我們帶來了一些曲線球，但 LKQ 團隊立即著手解決這些問題。

Their knowledge resilience and work ethic are second to none, and we will help us emerge even stronger from the challenging conditions facing our industry. I am very proud to work with this team, and I am excited about LKQ's future.

他們的知識彈性和職業道德是首屈一指的，我們將幫助我們在行業面臨的挑戰中變得更加強大。我很自豪能與這個團隊一起工作，我對 LKQ 的未來感到興奮。

I'd now ask the operator to open up the line for questions.

我現在請接線生開通電話詢問問題。

(Operator Instructions) Craig Kennison, Baird.

（操作員說明）Craig Kennison，Baird。

I just wondered if you could shed more light on the issue with respect to paint and the competition that you're seeing there. What's going on in that category? Do you think it's a change in the competitive landscape or just a tactical move by your competitors?

我只是想知道您是否可以進一步闡明有關油漆和您在那裡看到的競爭的問題。該類別發生了什麼事？您認為這是競爭格局的改變還是競爭對手的戰術舉措？

I'd say maybe a mixture of both, Craig. This is Justin. If you remember, last year, we announced the intent to acquire Uni-Select, and then it went six months, we were kind of in a quiet period. We couldn't talk to FinishMaster folks, we couldn't talk to the customers. And at that time, that quiet period creates some unsureness, and FinishMaster had lost some accounts pre-acquisition or pre-closing and leading into post-acquisition.

我想說也許兩者兼而有之，克雷格。這是賈斯汀。如果你還記得，去年我們宣布了收購 Uni-Select 的意向，然後六個月過去了，我們處於一段安靜的時期。我們無法與 FinishMaster 人員交談，也無法與客戶交談。當時，這段安靜的時期造成了一些不確定性，FinishMaster 在收購前或交割前以及收購後失去了一些帳戶。

As some of those contracts get worked on 6 months in advance. Additionally, there was a larger MSO that had been lost by FinishMaster, and that business was being migrated the way after we acquired and closed on FinishMaster. So we, obviously, we talked about rapidly integrating the footprint, integrating the sales teams.

因為其中一些合約提前 6 個月就開始生效。此外，還有一個更大的 MSO 被 FinishMaster 失去，在我們收購並關閉 FinishMaster 後，該業務正在以這種方式遷移。因此，顯然，我們討論了快速整合足跡、整合銷售團隊。

And so we kind of started off at a loss position of where we expected to be, but the teams have aligned the sales, refocused the groups collectively. And right now, we think that we're showing that we've moderated the loss and started to grow share. And really, we don't think there's anybody that can compete with us on our service and availability.

因此，我們一開始就處於預期的虧損狀態，但團隊已經協調了銷售，重新集中了各個團隊的注意力。現在，我們認為我們正在表明我們已經減輕了損失並開始增加份額。事實上，我們認為沒有人可以在我們的服務和可用性方面與我們競爭。

Maybe just, Justin, if you could shed light on the value proposition LKQ has with respect to having paint as part of your overall portfolio and whether that's persuasive to your customers?

也許只是，賈斯汀，如果您能闡明 LKQ 將油漆作為您整體產品組合的一部分的價值主張，以及這對您的客戶是否有說服力？

Yes. I mean as you guys may know, the margin on paint is lower than typically on parts. And so a lot of the paint competitors that we deal with, even FinishMaster prior to LKQ acquiring them, would cut their costs from the service level to make sure that they can maintain their profits, such as delivering once a week or delivering twice a week. So now when we've integrated the warehouses, FinishMaster into the LKQ footprint, we're delivering on our body shops 2 times a day, in some markets same day, every day of the week. And so we're able to put paint on that vehicle.

是的。我的意思是，你們可能知道，油漆的利潤比零件上的利潤還要低。所以很多和我們打交道的塗料競爭對手，甚至在LKQ收購他們之前的FinishMaster，都會從服務水平上削減成本，以確保他們能夠維持利潤，例如每週交付一次或每週交付兩次。因此，現在當我們將倉庫、FinishMaster 整合到 LKQ 足跡中時，我們每天向我們的車身修理廠送貨兩次，在某些市場上是同一天，每週的每一天。這樣我們就可以幫那輛車噴漆了。

So from a service level, from an inventory depth standpoint and availability, it's hard for any of these other paint distribution businesses to compete with us on a like-for-like, just because our cost structure, we already have the truck going there once again once a day or twice a day, with parts, both used in aftermarket, and then for us to add paint out of the same warehouse is just a marginal increase in cost. So from a service level and cost to serve, it's, in my opinion, it's very hard for our competition to compete with that.

因此，從服務水平，從庫存深度和可用性的角度來看，任何其他油漆分銷企業都很難與我們進行同類競爭，只是因為我們的成本結構，我們已經讓卡車去那裡一次一天一次或一天兩次，零件都在售後市場使用，然後我們從同一個倉庫添加油漆只是成本的邊際增加。因此，從服務水準和服務成本來看，我認為我們的競爭對手很難與之競爭。

Scott Stember, ROTH MKM.

斯科特·斯坦伯，羅斯 MKM。

Within North America, I'm trying to parse out what happened in the aftermarket. I remember last year, you guys caught lightning in a bottle because of State Farm coming back into the market and the availability of aftermarket parts increased. Is this more a function of tough comparisons for aftermarket? Or is there something going on where customers are shifting their focus and preference back to salvage?

在北美，我正在嘗試解析售後市場發生的事情。我記得去年，你們因為 State Farm 重新進入市場並且售後零件的供應量增加而受到了瓶子裡的閃電。這更多的是售後市場的嚴格比較的結果嗎？或者是否發生了一些事情，導致客戶將注意力和偏好轉移回了搶救？

I'm going to use that line, by the way, lightning in a bottle. I like that, Scott. Yes, I would say it's really tied to the repairable claims fees. I mean if you look at our aftermarket business, it's 100% tied to collision. And so when you see the claims drop, that puts a lot of downward pressure on the aftermarket piece.

順便說一句，我將使用那條線，瓶中閃電。我喜歡這樣，斯科特。是的，我想說這確實與可修復索賠費用有關。我的意思是，如果你看看我們的售後業務，你會發現它 100% 與碰撞有關。因此，當你看到索賠下降時，這會給售後市場帶來很大的下行壓力。

Like any time, we've talked about it in the last call, any time the market drops, our competitors don't necessarily -- whether that's OEM or whether that's other aftermarket distributors, our competitors don't necessarily know if it's the market or if it's the -- if they're losing share, so they get a little bit more aggressive on price, trying to get some share.

就像任何時候一樣，我們在上次電話會議中談到過，任何時候市場下跌，我們的競爭對手都不一定知道——無論是OEM 還是其他售後分銷商，我們的競爭對手不一定知道這是否是市場的問題或如果他們正在失去市場份額，那麼他們就會在價格上更加激進，試圖獲得一些市場份額。

So we don't chase price down, but it does create some pressure on the margin a little bit, but aftermarket, but the line issue with the drop in aftermarket would be tied to the repairable claims piece.

因此，我們不會追低價格，但這確實會對利潤造成一些壓力，但售後市場，但售後市場下降的線路問題將與可修復索賠部分相關。

Yes. Scott, just to add on to that just a minute. The other thing to think about is with State Farm coming up last year and you look at that compared to the repairable claims, there was a significant difference between the downgrade and the repairable claims in the back half of last year versus where our revenue was, that plus the strike that happened at the [OEs] last year did help our overall revenue. So the comps, you're correct on the aftermarket piece. There are tougher comps when you're looking at what happened within the industry last year as well.

是的。斯科特，補充一下。另一件需要考慮的事情是去年 State Farm 的出現，與可修復索賠相比，去年下半年的降級和可修復索賠與我們的收入相比存在顯著差異，再加上去年[OE] 發生的罷工確實對我們的整體收入有所幫助。所以從比較來看，你對售後市場的看法是正確的。當你看看去年行業內發生的事情時，你會發現更艱難的競爭。

Got it. And then just last question. There was a lot of things, a lot of transitory items, which impacted this quarter and probably the fourth quarter as well from the storms and strikes. Is there any way to quantify the impact from the storms for the full year? Or how much of your guidance coming down was because of that and the strike?

知道了。然後是最後一個問題。有很多事情，很多臨時項目影響了本季度，可能還有風暴和罷工影響了第四季度。有沒有辦法量化全年風暴的影響？或者您的指導意見下降有多少是因為這一事件和罷工？

Yes. So let me take that one, Scott. As far as the third quarter impact, there was a minimal impact on the storms. There was a Helene hit at the very end, and I talked about it just briefly that there's a little bit of an impact on the last week of the quarter. Going into Q4, we did see, obviously, Milton hit the southeast as well.

是的。那麼讓我來吧，史考特。就第三季的影響而言，風暴對影響很小。最後有一個海倫的打擊，我簡單地談到了對本季度最後一周有一點影響。進入第四季度，我們確實看到，顯然，米爾頓也襲擊了東南部。

And there was significant cleanup and there's still significant cleanup on Helene that we're still trying to quantify. We didn't receive very much, as Justin talked about, property damage, but we are still seeing the impacts of revenue. So part of what we're doing within our revenue and our overall EPS guidance, if you think about what we talked about at Investor Day, Investor Day, I talked about us being below our previous midpoint.

Helene 上也進行了大規模的清理工作，我們仍在嘗試對其進行量化。正如賈斯汀所說，我們沒有受到太多財產損失，但我們仍然看到收入的影響。因此，我們在收入和整體每股盈餘指引範圍內所做的部分工作，如果你想想我們在投資人日談論的內容，我談到我們低於先前的中點。

I think when we look back to where consensus was, it's below $3.50, $3.53, I think is where it was for the year. So if you think about the only thing that's really happened since then is a little bit further decline in repairable claims than what we had expected. We were expecting about what we saw in Q2, which was around 7%, and now it's a little north of 9%.

我認為當我們回顧共識時，它低於 3.50 美元、3.53 美元，我認為這是今年的水平。因此，如果您考慮一下自那時以來真正發生的唯一一件事，那就是可修復索賠比我們預期的進一步下降。我們預計第二季的成長率約為 7%，而現在略高於 9%。

So we're training that out. And then additionally, there's two hurricanes and a strike that happened. So that's how we get essentially that $0.07 dropping from that roughly $3.53 consensus down to the $3.45.

所以我們正在訓練它。此外，還發生了兩次颶風和一次罷工。這就是我們如何從大約 3.53 美元的共識跌至 3.45 美元的 0.07 美元。

Brian Butle, Stifel.

布萊恩·巴特爾，斯蒂菲爾。

When you're looking at 2025 and you talk about macro pressures abating at some point, what gives you confidence? I mean what -- is that you will see some kind of abatement of the claims issue into 2025? And is that a second half of '25 or is that kind of a first half? Just trying to get a sense of what you're thinking about from a perspective of timing on that? .

當您展望 2025 年並談到宏觀壓力在某個時候減輕時，是什麼給了您信心？我的意思是，到 2025 年您會看到索賠問題減少嗎？那是25年的下半場還是上半場？只是想從時間的角度來了解您在想什麼？。

Yes, Brian, I mean, if you -- on the repairable claims piece, as I talked about, it's really an output of how the insurance cost is affecting the consumers, whether that's in their premiums or whether that's a deductible that they may have raised, then relative to what that used car value is after that vehicle is fixed. I think we've seen -- there might have been a couple of increases with a couple of months here and there, but we've almost seen two years of declining used car pricing.

是的，布萊恩，我的意思是，如果你- 關於可修復索賠部分，正如我所說，這實際上是保險成本如何影響消費者的結果，無論是在他們的保費中還是在他們可能擁有的免賠額中提高，然後相對於該車輛修復後的二手車價值。我想我們已經看到——幾個月內可能會有幾次上漲，但我們幾乎看到二手車價格兩年來一直在下降。

And so we kind of -- and as we talk to people in the industry and outside of the industry, we kind of forecast that used car pricing, at some point, should moderate, hopefully in the back half of 2025 and start to show some improvement. As those used car values start to increase, it makes it more economical for consumers to repair their vehicles, whether it's from a collision or even general maintenance. So we think overall, some of that headwind of used car pricing should start subsiding, I would say, in the mid-2025 and start to show some improvements in the back half of next year.

因此，當我們與行業內和行業外的人士交談時，我們預測二手車定價在某個時候應該會放緩，希望在 2025 年下半年，並開始顯示出一些變化。隨著二手車價值開始增加，消費者修理車輛變得更加經濟，無論是碰撞事故還是一般維護。因此，我們認為總體而言，二手車定價的一些不利因素應該會在 2025 年中期開始消退，並在明年下半年開始出現一些改善。

Okay. That's helpful. And then on the free cash flow, you maintained that $850 million for 2024. What capital spending is either being pushed out or foregone kind of to hit that $850 million number? And how do we think about that again coming back online in 2025?

好的。這很有幫助。然後，在自由現金流方面，您在 2024 年保持了 8.5 億美元。為了達到 8.5 億美元的數字，需要哪些資本支出被推遲或放棄？我們如何看待 2025 年再次上線？

Yes, Brian, I can start off and take that. What I talked about, and I think it is important to -- cash is king, right? So if we look at $850 million, which is what we had all year long talking about our free cash flow, the team has done a tremendous job managing trade working capital. Trade working capital, the usage of our supply chain financing has been going up, the extension of terms. A large focus on trade working capital is the bulk of how we're able to achieve this even with a decline in overall EBITDA dollars.

是的，布萊恩，我可以開始接受這個。我談到的，我認為很重要的是──現金為王，對吧？因此，如果我們看看 8.5 億美元（這是我們一整年談論的自由現金流），我們的團隊在管理貿易營運資本方面做得非常出色。貿易流動資金，我們供應鏈融資的使用量一直在上升，期限也在延長。即使在整體 EBITDA 美元下降的情況下，我們仍能實現這一目標，主要是對貿易營運資本的高度重視。

When you look at some of the CapEx items that we're pushing off, there's always a need for it. But we're saying, look, let's make sure that there's nothing that's going to impact our overall earnings, nothing's going to impact our growth. And so there's some of the things that you can delay for three months, six months, something like that, that we're looking at the overall returns.

當你看到我們正在推遲的一些資本支出項目時，你會發現總是需要它。但我們要說的是，讓我們確保沒有任何事情會影響我們的整體收益，沒有任何事情會影響我們的成長。因此，有些事情你可以推遲三個月、六個月之類的，我們正在考慮整體回報。

And keep in mind as well, when Justin came on, he looked at the hurdle rates. And he wasn't just talking about acquisitions or divestitures, he's looking at overall hurdle rates. So there are some items that just quite honestly don't pass the hurdle rate that we've got in there. And so there's been a little bit of a change of -- look, if it's not going to pass the hurdle rate, there's a better use of our cash. And so that's the way to think of that.

還要記住，當賈斯汀上場時，他查看了最低門檻率。他不僅談論收購或剝離，他還關注整體最低門檻率。因此，老實說，有些項目沒有達到我們設定的最低門檻。因此，發生了一些變化——看，如果它不能超過最低門檻，我們的現金就可以得到更好的利用。這就是思考這個問題的方式。

It's not delaying repairs or anything like that, that would come in sort of increase the number next year because we've delayed it this year. It's more of, it just doesn't pass the hurdle rate, and it's a project that we're probably not just going to do.

這並不是推遲維修或類似的事情，明年的數量會增加，因為我們今年推遲了。更重要的是，它只是沒有通過門檻率，而且這是一個我們可能不會做的項目。

(Operator Instructions) Gary Prestopino, Barrington Research.

（操作員說明）Gary Prestopino，Barrington Research。

Justin, you mentioned that in Europe, you reviewed 25 product categories, 425,000 SKUs, about 50% of what you want to do. Will this be completed by the end of 2024 and then we can -- you will then start implementing changes that would benefit going into 2025?

Justin，您提到在歐洲，您審查了 25 個產品類別、425,000 個 SKU，大約是您想做的事情的 50%。這會在 2024 年底前完成嗎？

Yes, Gary. We do not forecast that we're going to be completed by the end of 2024. Our expectation is -- I mean you're talking, obviously, hundreds of thousands of SKUs, needing to understand the market dynamics of what those brands may, whether they're relevant in those markets or not, making sure that we have coverage by an application more so than coverage by a brand.

是的，加里。我們預計不會在 2024 年底前完成。我們的期望是——我的意思是，顯然，您正在談論數十萬個 SKU，需要了解這些品牌可能的市場動態，無論它們是否與這些市場相關，確保我們的覆蓋範圍一個應用程式比一個品牌的覆蓋範圍更重要。

We're projecting that the complete analysis will be done in early 2025, and we'll start to be able to make changes on our SKU, our stocking level of certain SKUs and start to show some of those improvements, although small in the back half of 2025. But it won't be done by the end of this year, but it should be done by the early Q1 -- early 2025, sorry.

我們預計完整的分析將在 2025 年初完成，我們將開始能夠對我們的 SKU、某些 SKU 的庫存水平進行更改，並開始展示其中的一些改進，儘管後面的改進很小2025 年一半。但今年年底前不會完成，但應該在第一季初（即 2025 年初）完成，抱歉。

Okay. And then just lastly, with the exit of operations in Poland and Bosnia. I mean in Europe, do you have any other small operations that you're considering closing in these various countries that -- or are you basically done with all that with these smaller cats and dog operations?

好的。最後，隨著波蘭和波斯尼亞業務的退出。我的意思是，在歐洲，您是否正在考慮在這些不同的國家關閉任何其他小型業務，或者您基本上已經完成了這些較小的貓和狗業務嗎？

Yes. Our review of the portfolio is a constant ongoing. There are other smaller operations, both in North America and in Europe that we're always analyzing. There may be some more on the horizon fund. Any time we do divestitures or something like that, my preference is just show you, don't tell you about it. So once again, our portfolio review is constant ongoing, and we'll continue to look at that.

是的。我們對投資組合的審查是持續不斷的。我們一直在分析北美和歐洲還有其他規模較小的業務。未來可能會有更多基金。任何時候我們進行資產剝離或類似的事情時，我的偏好只是向您展示，而不是告訴您。因此，我們的投資組合審查將持續進行，我們將繼續關注這一點。

Ryan Brinkman, JPMorgan.

瑞安·布林克曼，摩根大通。

This is Jash Patwa on for Ryan Brinkman. Justin, with the -- headwinds weighing on top line growth in the near term and visibility around recovery timeline seemingly low as of now in both North America and Europe, do you expect to see incremental acquisition opportunities in the market as relatively less sophisticated -- start to face the profitability front of these broader headwinds, especially given the lack of pricing discipline?

我是賈什·帕特瓦 (Jash Patwa)，代表瑞恩·布林克曼 (Ryan Brinkman) 發言。賈斯汀，鑑於近期營收成長面臨的阻力，以及北美和歐洲目前復甦時間表的可見性似乎很低，您是否預計市場上的增量收購機會相對不那麼複雜——開始面對這些更廣泛的不利因素的獲利能力，特別是考慮到缺乏定價紀律？

Just kind of get if the current environment could provide a conducive environment for accelerated industry consolidation and whether LKQ would be willing to lean incrementally into M&A if the opportunity arises? And I have a quick follow-up.

只是想知道當前的環境是否能為加速產業整合提供有利的環境，以及如果機會出現，LKQ是否願意逐步轉向併購？我有一個快速的跟進。

Yes. I guess, I mean mainly around the acquisition piece. We have definitely came out publicly and said we're not looking after any large acquisitions with the way our stock price is right now. We're heavily weighted towards share repurchase. There are acquisitions that we'll bring into the company, but these are smaller synergistic, highly synergistic tuck-in acquisitions that bring returns in the mid- to upper teens over a short period of time.

是的。我想，我的意思主要是圍繞著收購部分。我們確實公開表示，以我們目前的股價，我們不會尋求任何大型收購。我們非常重視股票回購。我們將進行一些收購，但這些都是較小的協同效應、高度協同效應的整合性收購，可以在短時間內帶來十幾歲左右的回報。

Think of acquisitions where we may have a market that has three step distribution. One of our customers is a wholesale distributor, and we can acquire that wholesale distributor that may be our customer and convert that market from three step to two step. So there are some that are opportunities, and we've done some. We'll continue to look at those, but they're going to be small and highly synergistic.

考慮一下我們可能擁有一個具有三步驟分佈的市場的收購。我們的一個客戶是批發分銷商，我們可以收購可能是我們客戶的批發分銷商，並將該市場從三步轉變為兩步。所以有些是機會，我們已經做了一些。我們將繼續關注這些，但它們規模較小且高度協同。

I think just to add on to -- one of the things I heard you talking about was consolidation within the overall marketplace. One of the things with LKQ having so many acquisitions over the last 25 years, we're involved with a lot of the discussions. And there's not anything that we're overly concerned about or something that we're seeing that is a major change in the overall market conditions that we won't be able to combat with the footprint that we have and something we're pretty confident on. And one thing, the line was a little bit shaky when you were talking, if there's anything that we missed on there, just let us know, and we can respond to that.

我想補充一下——我聽到你談論的一件事是整個市場的整合。LKQ 在過去 25 年裡進行瞭如此多的收購，其中之一就是我們參與了許多討論。沒有什麼是我們過度擔心的，也沒有什麼是我們所看到的整體市場狀況發生重大變化的，我們無法憑藉我們所擁有的足跡來應對，而且我們對此非常有信心在。有一件事，當你說話時，線路有點不穩定，如果我們錯過了什麼，請告訴我們，我們可以回應。

No, that's very helpful color. And I just wanted to get -- if you could give us an update on the Elitek diagnostics and calibration business. Any color around how that business has scaled over the past couple of years? How are you anticipating go-forward growth here? And how should we think about the scope and potential implications of the ongoing lawsuit with Repairify?

不，這是非常有用的顏色。我只是想知道您能否向我們提供有關 Elitek 診斷和校準業務的最新資訊。過去幾年該業務的規模有何變化？您預計這裡的未來成長如何？我們應該如何考慮與 Repairify 正在進行的訴訟的範圍和潛在影響？

Yes. On the Elitek piece, the majority of our business there is mobile where we actually have technicians going in and augmenting body shops work to make sure they can calibrate the vehicle and technical repairs. That business was growing pretty strong for us for a while. But with the repairable claims coming down as we have, it's kind of given some extra free time to body shops. In some cases, some of the MSOs to figure out how to do it internally right now. That business is still strong, good margins for us. The growth has slowed down, but it's still growing.

是的。在 Elitek 方面，我們的大部分業務都是移動的，我們實際上有技術人員參與，並擴大車身修理廠的工作，以確保他們能夠校準車輛和技術維修。有一段時間，我們的業務發展得相當強勁。但隨著可修復索賠的減少，這給了車身修理廠一些額外的空閒時間。在某些情況下，一些 MSO 需要立即在內部弄清楚如何執行此操作。這項業務仍然強勁，我們的利潤率很高。成長速度有所放緩，但仍在成長。

On the Repairify side, any -- once again, not much of our business is on the mobile -- I'm sorry, is on the remote piece. But we don't have any concerns with the IP on that case.

在 Repairify 方面，任何 - 再說一遍，我們的業務並不多在行動裝置上 - 抱歉，都是在遠端裝置上。但我們對該案的知識產權沒有任何擔憂。

Bret Jordan, Jefferies.

布雷特·喬丹，杰弗里斯。

On the working capital cash flow that you're seeing. Could you talk about sort of what [hitting] you're at there and how much you'll see still available after you generate cash from working capital this year?

關於您所看到的營運資金現金流。您能否談談您目前的情況以及今年從營運資金中產生現金後您將看到多少可用資金？

Yes, Bret. We've been seeing about a 10% improvement when we look at our overall trade working capital, particularly the payables and as well as the supply chain financing. We're seeing that again this year. If I look at our European operations, we're up almost 12% versus year-end on our supply chain financing program.

是的，布雷特。當我們觀察我們的整體貿易營運資金，特別是應付帳款和供應鏈融資時，我們看到了約 10% 的改善。今年我們再次看到這種情況。如果我看看我們的歐洲業務，我們的供應鏈融資計畫比年底成長了近 12%。

I would expect we probably have another year or two to be able to go with those. And then it starts to weigh in. And as far as the working capital goes, we're obviously making a really big push this year, especially with what's going on in the overall market dynamics to drive free cash flow and make sure that we deliver on the free cash flow commitment that we made at the beginning of the year.

我預計我們可能還有一兩年的時間來完成這些工作。然後它開始發揮作用。就營運資本而言，我們今年顯然正在大力推動，特別是考慮到整體市場動態的變化，以推動自由現金流，並確保我們兌現我們所承諾的自由現金流承諾。

And so the team is doing a tremendous job of doing that. I think we have a little bit more time to be able to enhance that going into 2025, and then it starts tapering off probably the back end of 2026.

因此，團隊正在為此做大量工作。我認為，到 2025 年，我們有更多的時間來增強這項能力，然後可能會在 2026 年底開始逐漸減少。

Okay. And then I think in your prepared remarks, you talked about sort of competition in Europe. Is that primarily GSF in the UK? Or is there other competition in other regional European markets? And could you maybe sort of parse out dispersion in Europe? You call that Germany and UK as weaker, was Benelux and Italy relatively stronger or all sort of in the same bucket?

好的。然後我認為在你準備好的演講中，你談到了歐洲的某種競爭。主要是英國的 GSF 嗎？或者歐洲其他區域市場是否有其他競爭？能否分析一下歐洲的分散情況？您認為德國和英國較弱，比荷盧經濟聯盟和義大利相對較強還是都處於同一水平？

I would say the worst economic ones were the UK and Germany. Economic slowdown in the Benelux area. Going back to your comment on competition. I mean, obviously, GSF is in the U.K. market, but we have competitors in every market for which we operate in. So any time there's some of those headwinds or market dynamics, sometimes the smaller competitors react differently. But I would say, every market, we have several different competitors that we compete with day in and day out.

我想說經濟最糟糕的是英國和德國。比荷盧經濟聯盟地區經濟放緩。回到你對競爭的評論。我的意思是，顯然，GSF 位於英國市場，但我們在我們經營的每個市場都有競爭對手。因此，每當出現一些逆風或市場動態時，有時較小的競爭對手會做出不同的反應。但我想說，每個市場，我們都有幾個不同的競爭對手，我們日復一日地與之競爭。

Great. Thank you.

偉大的。謝謝。

One thing -- I think we're getting close to the end of the overall questions. One of the things that came in through a couple of the analysts, I just want to make sure we're there. In the effort of doing our simplification and simplifying our new document that we put out for the press release and then also for the earnings presentation, we did pull out gross margin by segment. Let me give that to you.

一件事——我認為我們已經接近整體問題的結束。幾位分析師提出的一件事是，我只是想確保我們在那裡。在努力簡化和簡化我們為新聞稿和收益報告發布的新文件時，我們確實按部門提取了毛利率。讓我把它給你。

That's something that we don't have a problem giving. I just had pulled it out of the overall document. So I know there's a couple of questions. Craig, I -- had mentioned that as well. In North America, we had 42.8% in Q3. In Europe, we had 38.4%. And in Specialty, we had 26.0% and then in Self-service, we had 41.7%. So if that helps you guys with your models, I just want to make sure you had the data on the call.

這是我們沒有問題的。我剛剛把它從整個文檔中拉出來。所以我知道有幾個問題。克雷格，我──也提到過這一點。在北美，第三季我們的佔有率為 42.8%。在歐洲，我們有 38.4%。在專業領域，我們有 26.0%，在自助服務領域，我們有 41.7%。因此，如果這對你們的模型有幫助，我只是想確保你們在通話中掌握了數據。

And with that, lookls like we're going to wrap up the call, I want to give a huge shout out and the huge thanks to our over 50,000 employees for what they do every day. Our industry has faced challenges right now. It's not the first time. It won't be the last time. But I'm extremely proud of each and every one of our employees on how they reacted on the cost structure, how they reacted on making sure that we grew share or did not lose share.

就這樣，看起來我們要結束這通通話了，我想大聲疾呼，並對我們超過 50,000 名員工每天所做的工作表示衷心的感謝。我們的行業現在面臨挑戰。這已經不是第一次了。這不會是最後一次。但我為我們的每一位員工感到非常自豪，因為他們對成本結構的反應，以及他們對確保我們增加份額或不失去份額的反應。

Our company, LKQ is, with our size and scale, and quite honestly, our winning culture, there's nobody that can beat us in the future. So huge thanks to the employees for everything that you guys do. And also huge thanks for all those that participated on the call today. We appreciate it, and we will talk to you guys on the next.

我們的公司 LKQ 憑藉我們的規模和規模，老實說，我們的致勝文化，未來沒有人可以擊敗我們。非常感謝員工所做的一切。也非常感謝所有參加今天電話會議的人。我們對此表示感謝，我們將在接下來的內容中與大家討論。

Thank you. This concludes our call today. Thank you for your participation. You may now disconnect your lines.

謝謝。我們今天的電話會議到此結束。感謝您的參與。現在您可以斷開線路。