Formatted Report

24-Jul-2025

LKQ Corp. (LKQ) Q2 2025 Earnings Call

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

CORPORATE PARTICIPANTS

Joseph P. Boutross

Rick Galloway

Justin L. Jude

OTHER PARTICIPANTS

Scott L. Stember

Gary Frank Prestopino

Bret Jordan Jash Patwa Craig Kennison ......................................................................................................................................................................................................................................................

MANAGEMENT DISCUSSION SECTION

Joseph P. Boutross

GAAP AND NON-GAAP FINANCIAL MEASURES...........................................................................................................................

During this call, we will present both GAAP and non-GAAP financial measures
A reconciliation of GAAP to non-

press release, as well as

slide presentation

Justin L. Jude

BUSINESS HIGHLIGHTS ..............................................................................................................................................................................................

Opening Remarks

The year has presented some macro challenges and some short-term operational obstacles, but also opportunities for longer-term value creation
Alongside my leadership team, we have made some tough but necessary decisions to fundamentally reshape how we operate and put us back to a path of consistent value creation
The decisions made are aligned with our overarching strategy, a multiyear transformation to simplify our portfolio, sharpen our focus and position us as a high performing company centered on our core business segments

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

Our global team is laser-focused on growing our market share while driving productivity and efficiently managing our cost structure
At our September 2024 Investor Day, we set our strategic priorities, simplify our business portfolio and operations, expand our lean operating model globally with a focus on margin enhancement, invest and grow organically, and pursue a disciplined capital allocation strategy
And so, as we move forward, we are going to share how we are doing against each of these, a scorecard, if you will, that makes it clear for the investment community to see how we are doing
I
necessitated our revised guidance
We are not where we need to be

And so we are going to push harder and move faster

Cost-Cutting Measures and Capital Allocation Priorities

To that end, we are focused on two immediate things
One, additional cost-cutting measures, primarily in Europe, but also in North America, with a goal of cutting another $75mm in costs
Two, a heightened emphasis on the strategic review of our business units and operations that may result in the sale of assets that further accelerate our simplification strategy and capital allocation priorities
We are seeing a turn in the market for strategic activity, with credit markets opening, momentum behind mid-sized transactions and private equity actively seeking to deploy capital
While this will not be a linear process, I remain confident that we are on track to realize the full benefits of this strategy by 2027, as outlined at our September 2024 Investor Day

MACROECONOMIC ENVIRONMENT

It is worth noting that we are doing these things at a time when there are broader challenges in the overall auto industry and macroeconomic environment
It is a dynamic and fluid environment
Given amongst other factors, the rising input costs and the uncertainties around tariffs are creating confusion
We are not alone in the industry in facing these challenges, but you can either complain and make excuses or focus on your business and operating model to deliver the best possible results
Our team has chosen to focus on executing our plan, controlling the things we can such as being efficient in managing our costs and looking for opportunities to take advantage of the current dislocations and disruptions in our core markets to gain market share and expand margins
actions to remove $125mm of cost in the past 12 months without compromising our ability to execute and service our customers

This is just a first step

And as I mentioned, we are going to continue to scrutinize our cost structure and find additional ways to enhance our margins

North America

Next, I will discuss our business segments

North America is first

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

c revenue fell by 2.2% per day, which is less of a decline than the last five quarters
and an outperformance of repairable claims by over 650BPS, well above our historical 450BPS outperformance
Importantly, our aftermarket collision parts business witnessed slight growth in the quarter
We are still seeing consistent demand across our hard parts business in Canada and margin enhancement as we convert from three-step to two-step
Lastly, as an update to the issue of repairable claims resulting from declining used car pricing and rising insurance premiums, we previously said that the comps will start to ease as we progress into 2025 However, the June numbers were weaker than anticipated, and at this juncture, we think it is prudent to assume minimal market recovery in the back half of the year

Europe

ORGANIC REVENUE

Moving on to Europe

economic conditions, increased competition in certain markets, and some temporary headwinds due to operational challenges
We expect the economic conditions to continue throughout the balance of the year, along with the competitive pressures, which has led to price concessions
tional account agreements and re-signed
all but one, validating the strong value proposition we offer to our customers

OPERATIONAL CHALLENGES

Regarding the operational challenges impacting revenue, in a nutshell, we unintentionally created negative customer experiences and ultimately, top line erosion
and ultimately, our share of wallet back
One thing I would like to emphasize here is that Europe represents a significant opportunity for us As I mentioned in the past, we need the right leaders in place to truly drive the change and achieve the benefits of scale that Europe represents

LEADERSHIP CHANGES

After recently making significant leadership changes, we now believe we have the right people This revamped team is now focused on process and performance, both of which have been lagged in certain areas of our European business
This lack of focus from previous leaders played a role in the underperformance in the quarter and it will take some time to manage these legacy issues
However, we are confident that we are on track with the three-year targets presented at our September 2024 Investor Day
I was in Europe the last week of June to meet with our management teams, and we will be focused on ensuring we are moving quickly to implement our strategy in that market
Europe is a competitive marketplace and our focus is on key geographies where we have the ability to be a top player
We continue to make progress on our SKU rationalization goals

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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SKU RATIONALIZATION PROJECT

Our SKU rationalization project in Europe aims to reduce complexity and simplify our distribution network across all markets
We have reviewed over 70% of our product brands and reduced stocking by an additional 13,000 SKUs Our private label penetration was flat sequentially, but up 20BPS YTD, keeping us on track to hit our 2027 target of 27%
In addition to our SKU rationalization, we are streamlining our operations and reducing costs through back office and systems rationalization programs, as well as greater utilization of our global competency centers
continue as the leading European player
We started executing on this goal as we recently announced our partnership with SYNETIQ Limited,
benefit from the full service salvage intellectual capital in North America

Specialty

Moving on to Specialty
Specialty has turned the corner and is seeing improved results
-over-y, which is the best quarterly y-over-y revenue
performance since Q4 2021
We are cautiously optimistic this segment is starting to show green shoots as our July revenue has continued to show positive trends we saw in June

Self Service

Lastly, Self Service

naged to
deliver a 10% EBITDA margin
Disciplined vehicle procurement, combined with overhead cost controls continued to help drive profitable quarterly results in this segment
I want to stress that people are our greatest assets

Ensuring we have the most talent and effective team is critical to our success

Global Talent Development

As a result, we have created an executive position focused on global talent development
We think this will be an important role, and we are excited about how it will support our overall business around the globe
A few facts that I think are important to share on talent
Since I took over the CEO role last July, we have taken difficult, bold and necessary steps to reshape our leadership team
Over 25% of the roles at the VP level and above have been refreshed with new talent or redefined responsibilities

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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TRANSFORMATION

This level of transformation reflects our commitment to building a high performing, agile organization
seats
These changes, while not without challenges, are foundational to driving sustainable growth and consistent performance, which yield long-term value creation for shareholders
Equally important is the strength of our talent pipeline
Over 50% of it now comes from external hires with a high focus on our European operations to lead us through business transformation
This infusion of fresh perspectives and different experiences is accelerating innovation, bringing a clearer lens on growing the business, finding efficiencies and positioning us for the future

CLOSING REMARKS ..........................................................................................................................................................................................................

the following

We have size, scale and an unmatched distribution network
We know the current results are yet to reflect the value we are creating, and we share your frustration
But we are solidifying our foundation and ensuring when the cycle turns in this sector that we will be in the strongest position to capitalize on it to deliver results for our customers, partners, and importantly, our shareholders

That is our mission and we are hell bent on accomplishing it

Rick Galloway

FINANCIAL HIGHLIGHTS .........................................................................................................................................................................................

Opening Remarks

transformation strategy that includes, simplifying the business and reshaping our focus on core segments We are and will continue to be relentless in our pursuit of these goals

Revenues, Earnings and FCF

Now turning to Q2 results

As Justin said in his remarks, our results are yet to reflect all of these efforts and Q2 results were below our expectations
While our initiatives are underway, revenue declines overall have created margin pressure driving down our earnings and FCF
We reported total revenues of $3.6B
Diluted EPS were $0.75, $0.05 increase compared to Q2 2024
On an adjusted diluted EPS basis, we reported $0.87, a decrease of $0.11 per share vs. prior year primarily due to lower operating results

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

Share Repurchases, FX Rate and Dividend

On a positive note, execution on our balanced capital allocation strategy benefited EPS by $0.03 from share repurchases and another $0.01for interest

FX rates added another $0.03

FCF during the quarter was $243mm despite a nearly $35mm headwind from tariffs, bringing the YTD cash flows to $186mm
We anticipate generating positive FCF in the next two quarters, but tariffs will present a working capital challenge in the back half of the year that I will discuss shortly
We returned $117mm to shareholders, including $39mm to repurchase 1mm shares and $78mm for our quarterly dividend
We remain focused on deploying capital in a way that maximizes shareholder value while supporting growth
In North America, we are pleased with our top line performance, given the market pressure, as we work through the continued decline in repairable claims
We are confident we are increasing our market share in a declining market
However, increasing competition and market dynamics contributed to a 100 basis point decline in gross margins

Segment EBITDA Margin

NORTH AMERICA AND EUROPE

North America posted a segment EBITDA margin of 15.8%, a 150 basis point decrease relative to last year, or roughly 10BPS better than Q1
The decline in gross margins and leverage effect from lower revenue on overheads contributed to the decline in EBITDA margins
In Europe, segment EBITDA was 9.4%, a 120 basis point decrease from last year
recorded after a successful conclusion to the union negotiations in Germany
This benefited the prior year by roughly 70BPS
Excluding this non-recurring prior year benefit, EBITDA margins declined by 50BPS
We were pleased to see the y-over-y gross margin improvement resulting from procurement initiatives and ongoing productivity measures that outpaced inflation
However, the organic revenue decline put pressure on overhead expense leverage, resulting in the decrease to segment EBITDA margins

SPECIALTY AND SELF SERVICE

costs related to inflationary cost increases
With organic revenue being largely flat y-overencouraged by these recent trends heading into the back half of the year Self Service reported EBITDA margin of 10% consistent with the prior year

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

BALANCE SHEET..................................................................................................................................................................................................................

Debt and EBITDA

Turning now to the balance sheet, we repaid approximately $111mm of debt in the quarter As of June 30, we had total debt of $4.5B with a total leverage ratio of 2.6 times EBITDA
We remain committed to maintaining a manageable debt level and our investment grade ratings As of June 30, 2025, our current debt maturities were $34mm, a reduction from the $558mm on March 31, 2025 as we extended the maturity date of the $500mm US term loan by one year to Q1 2027

Capital Structure

As normal practice, we actively manage our capital structure and we are working through our options with our lending group, regarding the Canadian term loan due in Q3 2026
We think in a high interest rate environment, ensuring our cost of capital is reasonable and managing the timing of our maturities is an important piece of prudent financial management

INTEREST RATE

Our effective interest rate was 5.2% at the end of Q2, consistent with Q1
We have $1.8B in variable rate debt, of which $700mm has been fixed with interest rate swaps, which effectively provides a fixed rate on approximately 75% of our debt
Given the confluence of macroeconomic factors in both North America and Europe, coupled with the results this quarter, we are lowering our full year outlook
In North America, we are anticipating a delayed recovery in repairable claims, ongoing tariff disruptions and competitive market dynamics
In Europe, persistent economic softness, geopolitical unrest and ongoing US trade negotiations are all drivers of an uncertain environment

REPAIRABLE CLAIM

quarter, despite our anticipated recovery
Based on current industry data and recent trends, we no longer expect these declines to rebound in 2025 Auto insurance prices are still rising and are expected to increase an average of 7.5% this year
According to a recent survey, nearly one in four people have downgraded or dropped their auto insurance to free up cash
To help further depict the economic factors driving the current market dynamics around repairable claims, we included a slide in the appendix on page 17 with data derived from our proprietary analysis
The ever-changing tariff landscape further erodes consumer confidence and also complicates the views toward a more linear recovery

PRICING AND REVENUE

While we have been pricing in the impact from tariffs, our market remains competitive, and it may be difficult to maintain margins at the same levels in the short-term
In Europe, with the persistent softness in many of our markets and increased geopolitical unrest, we are no longer anticipating market improvements

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

To mitigate the lower revenue expectations, we have taken corrective action, including leadership changes and productivity initiatives, and are targeting additional cost removal in the back half of the year However, these actions will not be enough to offset the full year impact of lower revenue

2025

Turning back to 2025

Our revised outlook and assumptions are included on slide 13
We expect reported organic parts and services revenue in the range of negative 150BPS to negative 350BPS.
As a result of the revenue headwinds, we expect adjusted diluted EPS to be in the range of $3 to $3.30, a decrease of $0.40 from the midpoint from the previous guidance
Approximately half of the decrease is from our North American segment, 40% from Europe and the remainder is largely from higher interest expense
FCF will be impacted by the anticipated decrease in earnings and the impact of tariffs on working capital that will be on the balance sheet at year-end
To partially mitigate these headwinds, we are reducing our anticipated capital spend by approximately $50mm
We will continue to diligently manage our trade working capital in order to mitigate the lower earnings and tariff impact to drive EBITDA conversion to the extent possible

FCF is expected to be in the range of approximately $600mm to $750mm

Justin L. Jude

As stated at the outset, we have made some tough but necessary decisions to fundamentally reshape how we operate and put us back on the path toward consistent value creation
We need to set ourselves up for success and be able to deliver on what we say we are going to do We are implementing our strategic plan and we are holding ourselves accountable to deliver that plan In closing, I want to reiterate our key strategic priorities
Simplify our business portfolio and operations; expand our lean operating model globally with a focus on margin enhancement; invest and grow organically; and pursue a disciplined capital allocation strategy Our foot is on the accelerator to deliver these strategic initiatives and create value for our shareholders We expect to see the results and we know you do, too

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

QUESTION AND ANSWER SECTION

Scott L. Stember

Q

Could you maybe, yeah, talk about some of the talking about, and last quarter we were talking about used car pricing starting to increase, that might be helping. Are you not seeing that anymore as a driver towards a recovery in claims?

Justin L. Jude

On the used car pricing, when we if you look at Q2, the beginning of it, April and May, we started to see some that, there was a kind of some pulled-up demand of new car sales, which drove up some used car pricing. So we -over-y growth, but not necessarily month-over-month.

And so, if you take that used car pricing change y-oversame rate, which is once again creating that gap between repairable claims. ......................................................................................................................................................................................................................................................

Rick Galloway

expand better than what we are seeing on the overall repairable claims. So, the business is really picking up a fair amount of market sh

is going to have slight improvements, but the business is operating very, very well. Continues to drive performance, continues to pick up share, continues to diversify the portfolio, so all good news on that side of what we can control.

Scott L. Stember

Got you. And then last in Europe, one of your biggest competitors over there yesterday reported some relatively combination of the market being increasingly weak plus the competitive nature picking up? ......................................................................................................................................................................................................................................................

Justin L. Jude

those conflicted

we operate in different markets.

small, we grew.

compare. But the markets that

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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In some cases, as I mentioned in the past, pricing becomes a problem with the smaller competitors. But as I mentioned, specifically in the UK, we renegotiated several dozen different contracts with our national accounts chase the price all the way down. It did not make sense.

So, when you really look at the value proposition that we offer to our customers, when it comes to service levels, fill rate, we have to sharpen our pencils a little bit, but with that down in marke maintaining market share.

Bret Jordan

The European topic, I guess, is GSF, obviously the UK pricing issue and are they abating on the price competition or does that remain as hot as ever? And then, I guess Could you talk about the relatively weaker markets, where did you see the real softness?

Justin L. Jude

Yeah, in UK in particular, I mean, GSF is still sense. So it

ok at some of the pricing that we

I was just there, as I mentioned in my script at the end of June, meeting with the team, talking about not only the long-term strategy plan to integrate that business, transform that business, to really deliver significant opportunity working on implementing lean operating model. They have cost cutting measures, $35mm of cost cutting that I mentioned primarily will be in

portfolio for us on

products.

Bret Jordan

Okay. And on the North American collision, I think you mentioned some price increase. Can you tell us what you took for price increase? ......................................................................................................................................................................................................................................................

Justin L. Jude

you read the headlines on a big

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

The good news is, obviously, the most tariffed product line that we have is aftermarket. And with repairable claims being down 9%, our actual volume on aftermarket was positive in the quarter. So, even though we push price, we maintained service levels which with the leverage impacted our margin somewhat, but we wanted to make sure we maintain our service levels. It allowed us to outperform the market. I mean, we grew 650BPS, as Rick mentioned, over the repairable claim decline. And we really want to just be poised from a service level and availability standpoint to gain that leverage when the market recovers.

Craig Kennison

Really appreciate appendix one, slide 17 and trying to understand that even better. Your unrepaired vehicle metric seems to be one of the top issues that you face. How do you see that unfolding? Some of those trends look to be very long-term while they may be cyclical, insurance rates are still high and that behavior may persist

Justin L. Jude

we saw some green shoots in used car pricing as we you look at

the big overall picture, Craig, on the just the industry in general, I mean, as I mentioned earlier, the OEMs are under tremendous pressure, a lot of tariff impact for them.

Lost profits, they are going to have no choice but to pass on pricing increase, new car sales to offset the volume. higher used car pricing, higher cart part higher part pricing, more car sales on a new side leads into our sweet spot.

And so the repair well the unrepaired vehicles, that number has grown. That is cyclical as you mentioned our insurance companies want to gain market share. Used car pricing at some point will start to rebound to grow at the same rate of repair cost and so at some point we see that unrepaired vehicles coming back to more of a normal number.

down market, repairable claims being down 9%, the in some cases, if you look at that chart you mentioned, you look at self-

-pay. I mean overall, just with our service levels

In addition to help offset, or create revenue opportunities, our hard parts business in Canada is performing really well as well as we convert that from three-step to two-step. So sitting

Craig Kennison

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

Justin L. Jude

Yeah, I know the number went up about 150BPS.

Rick Galloway

Justin L. Jude

Yeah. And when you

on our salvage. So, it pushes towards salvage. It pushes more towards aftermarket. And so that APU growth is just

Gary Frank Prestopino

In your narrative, like

to focus on cost cuts there. I mean, I think you basically said that you would also been going through some change in personnel over there since the start of the year. Are you where you need to be and as far as should we start seeing that impact come into the P&L?

Justin L. Jude

we brought on new skillwhile mentioned in our Investor Day, our threetruly a three-year plan that the team has to execute.

initiatives, but they are truly laser-focused, working on the three-year strat plan, integrating that business, transforming it to really unlock the significant potential that I feel we have over there.

Rick Galloway

I think the target that Justin gave out, $75mm, the vast majority of that is coming from our European operations. As you know, Gary, it takes a little while to get some of those implemented. I would expect those to be primarily implemented by the end of Q4. And so you should see the full benefit of that in 2026.

Gary Frank Prestopino

Okay. And did you quantify on EPS and what the impact of the tariffs was on the bottom line?

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

Rick Galloway

Yeah. So, Gary, we think we have the ability to pass through all of our tariff costs. And so w those through. What we are seeing as well, as what Justin talked about as far as the competitiveness in the pricing, through when we net out the cost.

...................................................................................................................................................................................................................................................... Gary Frank Prestopino Q ......................................................................................................................................................................................................................................................

Gary Frank Prestopino

Rick Galloway

No, not so far. Justin talked about saw in Q2, OEs started raising their prices and we started doing the same. ......................................................................................................................................................................................................................................................

Gary Frank Prestopino

in the slide that you put in 17, has there been any change in the impact of ADAS on accident volumes from where you talked about during your -minimis due to ADAS?

Justin L. Jude

I mean the long-term outlook remains the same. If you compare on or 2022 to 2025. And so ADAS, the technology did have an impact on overall accidents. It was offset by just some of that kind of, what I would call, COVID snapback, more people getting back into the office, more miles traveled, more vehicles in operation. So, actuality, we saw the true accidents increase. Long-term, we still see ADAS having a slight headwind on overall accidents.

nts from ADAS, the

opportunity, you look at just part proliferation, more parts on the estimate, the ability for us to gain share and push price. So, we still see the overall collision market being very strong for us.

Jash Patwa

I was hoping to just talk to the right to appraisal legislation in some key states like Texas and New Jersey. Could you maybe talk about the implications from a repairable claim standpoint and whether this could move the needle on total loss frequencies if adopted by more states? Thanks and I have a follow up.

Justin L. Jude

I mean,

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

Formatted Report 24-Jul-2025

on the appraisal to your point or the total loss value. So, my guess is most consumers would want a higher total loss. And typically when there is higher total loss amount that leads to more repairable claims.

own government affairs department that helps us navigate through some of these things, making sure that consumers have a choice in getting their een so far, Jash, has any impact to us.

Jash Patwa

Q

Could you maybe talk about the production flexibility of some of your key suppliers? Many aftermarket peers have shared their intentions to relocate production to Mexican facilities and mitigate the tariff impact from USMCA compliance. Is that something you are seeing with their vendor base? And if you could just provide some more flavor on those conversations you are having?

Justin L. Jude

Yeah. I mean, a lot of the aftermarket collision has historically always been in Taiwan. We do have some of those Taiwanese manufacturers that have production in the States. Some have looked at Mexico. The real benefit good opportunity for us and better value proposition. But as of now, I think in some cases a lot of the manufacturers are waiting to see what happens with the final tariff. So, no major movement yet.

Jash Patwa

Got it. If I could just sneak one more in. Could you maybe just provide a breakdown of the collision vs. noncollision organic revenue growth in North America? I believe you called out non-collision revenue to be strong in Q2. Just wondering if you could put some numbers around that, please?

Rick Galloway

at. What Justin talked about was volume for

aftermarket parts was actually up in the quarter. So aftermarket volume was up a bit. What we are seeing is on the downside, things that are kind of the last thing to do within the repair which is paint, as a goo down greater than what even the repairable claims are because that is essentially the last piece of the overall is better than the negative 2.5% or 2.2% that we put in for the quarter.

mechanicals that are down a bit more than what we had expected before. And typically that happens when used car prices have flatlined and some of the car part is getting a little bit older. The decision to actually repair that engine is something that the consumers weigh.

Bret Jordan

A follow up on the IAA SYNETIQ partnership in the UK. Is there a CapEx involved in that, do you need to build the dismantling yards to create alternative collision parts? Or is that on their infrastructure?

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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Justin L. Jude

they need a sales ar collision parts provider on the aftermarket side. So, being able to take some of those products and move int network, and it was so really no CapEx. It was already set up on the infrastructure side. ........................................................................................................................................................................................................................................	m, o our ..............
Bret Jordan	Q
enues in the UK now so we can benchmark that? ........................................................................................................................................................................................................................................	..............
Rick Galloway	A
........................................................................................................................................................................................................................................	..............
Justin L. Jude	A
Parts alone, yeah... ........................................................................................................................................................................................................................................	..............
Rick Galloway	A
Parts alone on the market of this. ........................................................................................................................................................................................................................................	..............
Justin L. Jude	A
Yeah, it would be well over $100mm, yeah. ........................................................................................................................................................................................................................................	..............
Rick Galloway	A
Yeah. ........................................................................................................................................................................................................................................	..............
Justin L. Jude	A
Yeah, okay. ........................................................................................................................................................................................................................................	..............
Rick Galloway	A
a little bit different, Bret. ........................................................................................................................................................................................................................................	..............

Scott L. Stember

that what you needed to offset? And just trying to get a sense of coming out of last quarter, the narrative was that you guys could more or less offset or it would be very, very manageable for you. Are you changing that narrative at this point right now?

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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Rick Galloway

The $35mm

with pricing.

one thing that we need to figure out and are going to continue to drive is the impact of trade working capital with the year.

Justin L. Jude

confident we can mitigate it, at least push the price to cover the tariffs. Historically, what w concern for us on the tariff increase on the cost side, being able to pass that through.

Justin L. Jude

In closing, even with the challenge that we talked about on repairable claims in North America, I just want to give a shout out to the team in North America. I mean, they absolutely crushed it, outperformed the market by 650BPS
market recovers
And our Europe team, once again, I was just over there a month ago, really enjoyed meeting with some of our new key leaders, working with them on some of the cost cutting actions
-year strat plan, but the integration and trend -set and mindset
loyees, so I just want to say thank you to all the
employees that helped us deliver and continue to deliver every day

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LKQ Corp. ( LKQ) Q2 2025 Earnings Call

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LKQ CORP — Call Transcript 2025

30750_rns_2025-08-18_6a3dccb0-5c45-454c-96fe-b124cce9bf55.pdf

24-Jul-2025

CORPORATE PARTICIPANTS

OTHER PARTICIPANTS

MANAGEMENT DISCUSSION SECTION

Joseph P. Boutross

Justin L. Jude

Opening Remarks

Cost-Cutting Measures and Capital Allocation Priorities

MACROECONOMIC ENVIRONMENT

North America

Europe

ORGANIC REVENUE

OPERATIONAL CHALLENGES

LEADERSHIP CHANGES

SKU RATIONALIZATION PROJECT

Specialty

Self Service

Global Talent Development

TRANSFORMATION

Rick Galloway

Opening Remarks

Revenues, Earnings and FCF

Segment EBITDA Margin

SPECIALTY AND SELF SERVICE

Debt and EBITDA

Capital Structure

INTEREST RATE

REPAIRABLE CLAIM

PRICING AND REVENUE

Justin L. Jude

QUESTION AND ANSWER SECTION

Scott L. Stember

Q

Justin L. Jude

Rick Galloway

Scott L. Stember

Justin L. Jude

Bret Jordan

Justin L. Jude

Bret Jordan

Justin L. Jude

Craig Kennison

Justin L. Jude

Craig Kennison

Justin L. Jude

Rick Galloway

Justin L. Jude

Gary Frank Prestopino

Justin L. Jude

Rick Galloway

Gary Frank Prestopino

Rick Galloway

Gary Frank Prestopino

Rick Galloway

Gary Frank Prestopino

Justin L. Jude

Jash Patwa

Justin L. Jude

Jash Patwa

Q

Justin L. Jude

Jash Patwa

Rick Galloway

Bret Jordan

Justin L. Jude

Scott L. Stember

Rick Galloway

Justin L. Jude

Justin L. Jude

Disclaimer

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LKQ CORP Call Transcript 2025