Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q2 2019 Earnings Presentation
29 slides from Penske Automotive's earnings presentation, Jul 30, 2019
Slide 1: Second Quarter 2019 Financial Results & Update
Second Quarter 2019 Financial Results & Update
Slide 2: Forward-looking statements
Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s financial results, future sales, earnings potential, and liquidity. Actual results may vary materially because of risks and uncertainties that are di
Slide 3: Penske Automotive Group Overview
Penske Automotive Group Overview • A diversified transportation services company with estimated annual revenues in excess of $24 billion • Operations across four continents and nine countries • 272 Retail automotive locations world-wide • 258 Automotive dealerships • 14 Stand-alone used vehicle Supe
Slide 4: Diversification
Diversification FRANCHISED AUTOMOTIVE DEALERSHIPS LEASING, RENTAL & COMMERCIAL TRUCK LOGISTICS* DEALERSHIPS USED VEHICLE TRUCK DISTRIBUTION SUPERCENTERS & POWER SYSTEMS * PAG maintains a 28.9% ownership interest in Penske Truck Leasing and records a share of earnings using the equity method. 4
Slide 5: 6M 2019 Cash Flow From Operations
6M 2019 Cash Flow From Operations ($ in Millions) Debt Remained Flat With Year End Cash Flow From Operations Capital Allocation $7 $65 $122 $130 $305 Cash From Operations Non-Trade FloorPlan Dividends Share Repurchases Cap Ex, Net 5
Slide 6: Second Quarter 2019
SECOND QUARTER 2019
Slide 7: Q2 2019 Key Takeaways
Q2 2019 Key Takeaways Retail Automotive Commercial Trucks Capital Allocation • Same-store variable gross • 23.2% Same-store Unit • Increased dividend to $0.40 profit +$71/unit, excluding Growth per share foreign exchange • 26.1% Same-store Revenue • Repurchased 1.7 million • Same-store service and p
Slide 8: Q2 2019 Retail Automotive Key Metrics
Q2 2019 Retail Automotive Key Metrics Q2 ’19 Q2 ’18 Change Volume Metrics Same-Store New Units 54,540 59,938 -9.0% Used Retail Units 71,411 71,804 -0.5% Used to New Ratio 1.31 1.20 +9.3% Margin Metrics Same-Store New Margin 7.5% 7.5% flat Used Margin 5.5% 5.9% -40 bps Fixed Margin 59.6% 60.0% -40 bp
Slide 9: Q2 Revenue & EBT
Q2 Revenue & EBT Revenue Revenue Earnings Before Tax $5.8 Billion $5.8 Billion $160 Million 7% 12% 33% 58% 90% 3% 61% 27% 9% Retail North America Retail Commercial Other* Automotive United Kingdom Truck Other *Includes equity income from joint venture investments, including Penske Truck Leasing 9
Slide 10: Q2 Service & Parts Gross Profit
Q2 Service & Parts Gross Profit Service & Parts Generated 45% of Total Gross Profit Service/Parts Gross Profit Retail Automotive $328.3 Retail Commercial Truck $37.3 Australia/New Zealand $25.4 Total Service & Parts Gross $391.0 Total Gross Profit $867.8 Service & Parts (as a % of Total Gross Profit
Slide 11: Appendix
APPENDIX PENSKE Automotive
Slide 12: Appendix Table of Contents
Appendix Table of Contents Page # Retail Commercial Truck Dealerships 13 Used Vehicle SuperCenters 17 Penske Truck Leasing 20 Digital Initiatives 23 Non-GAAP Reconciliations 27
Slide 13: Retail Commercial Truck Dealerships
RETAIL COMMERCIAL TRUCK DEALERSHIPS
Slide 14: Q2 2019 Retail Truck Key Metrics
Q2 2019 Retail Truck Key Metrics Q2 ’19 Q2 ’18 Chg Chg % Volume Metrics Same-Store New Units 2,647 2,021 +626 +31.0% Used Retail Units 441 486 (45) (9.3%) Gross Per Unit Same-Store New Vehicle $4,461 $4,673 ($212) (4.5%) Used Vehicle $6,575 $6,469 +$106 +1.6% F&I $926 $1,301 ($375) (28.8%) 14
Slide 15: Retail Commercial Truck Revenue & Gross
Retail Commercial Truck Revenue & Gross Q2 2019 64% of Gross Profit From Service & Parts Revenue Gross Profit 7% 5% 22% 20% 64% 69% 6% 5% New Used S&P F&I Other 15
Slide 16: Warner Truck Centers Overview
Warner Truck Centers Overview • 8 operating locations - 6 dealerships and 2 customer support facilities in Utah and Idaho • 6,000 new trucks, 2,500 used trucks annually • $1.1B in estimated annualized revenue Warner Truck Group Locations 16
Slide 17: Used SuperCenters
USED SUPERCENTERS
Slide 18: Used Vehicle SuperCenters
Used Vehicle SuperCenters Q2 ‘19 Q2 ‘18 Chg. Chg. % Used Units Retailed 17,775 18,832 (1,057) (5.6%) Revenue (in millions) $312.1 $346.7 ($34.6) (10.0%) Avg. Transaction Price $14,797 $15,304 ($507) (3.3%) Total Variable Gross/Unit $2,158 $2,266 ($108) (4.8%) Margin 14.6% 14.8% n/a -20 bps 18
Slide 19: SuperCenters Revenue & Gross
SuperCenters Revenue & Gross (Q2 YTD 2019) Revenue Gross Profit 4% 8% 84% 34% 45% 7% 1% 17% Used Wholesale S&P F&I 19
Slide 20: Penske Truck Leasing
PENSKE TRUCK LEASING
Slide 21: Penske Truck Leasing Overview
Penske Truck Leasing Overview Full-Service Contract Truck Logistics Leasing Maintenance Rental Services • $15.7 billion total assets Operating Revenue • $8.8 billion in estimated total Logistics annual revenue 27% 46% • Over 300,000 vehicles on the road 27% • PAG recorded equity income of Rental $38
Slide 22: PTL Performance Summary
PTL Performance Summary Q2 Total Revenue Q2 Net Income ($ in Billions) ($ in Millions) $2.255 $2.053 $132 $1.752 $109 $121 Q2 '17 Q2 '18 Q2 '19 Q2 '17 Q2 '18 Q2 '19 22
Slide 23: Digital Initiatives
DIGITAL INITIATIVES
Slide 24: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • 59,000 new and used vehicles online via websites and social channels • Provide, chat, text, mobile, desktop opportunity, including service appointment scheduling, online payments and vehicle purchase through Preferred Purchase • 33% of U.S. unit sales are from digi
Slide 25: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • Installing docuPAD in U.S. dealerships • Digital customer engagement in the F&I office through menu presentation and document processing • Electronic documents • In the process of launching (occurring in multiple stages) a new e-commerce platform in the U.K. 25
Slide 26: Best Dealerships to Work For
Best Dealerships to Work For 33 Dealerships Names Best To Work For in 2019 26
Slide 27: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 28: EBITDA Reconciliation
EBITDA Reconciliation ($ in Millions) Q2 ’19 Q2 ’18 6M ’19 6M ‘18 Net Income $118.5 $135.2 $217.7 $243.0 Depreciation $27.1 $25.7 $53.5 $51.3 Other Interest $30.4 $28.6 $60.3 $58.4 Income Taxes $41.5 $41.0 $76.2 $77.6 (Income)/Loss from Disc. Ops. ($0.1) -- ($0.2) ($0.1) EBITDA $217.4 $230.5 $407.5
Slide 29: Automotive
Automotive
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