Slide 1: AutoCanada Investor Presentation Q4 2021
AUTOCANADA INVESTOR PRESENTATION Q4 2021 MARCH 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statement Certain information contained in this presentation is forward-looking information within the meaning of applicable Canadian securities legislation. The use of any of the words “could”, “expect”, “believe”, “will”, “projected”, “estimated” and simi
Slide 3: Non-GAAP and Other Financial Measures
Non-GAAP and Other Financial Measures Non-GAAP and Other Financial Measures This investor presentation contains certain financial measures that do not have any standardized meaning prescribed by Canadian GAAP. Therefore, these financial measures may not be comparable to similar measures presented by
Slide 4: Who We Are
WHO WE ARE
Slide 5: AutoCanada Overview
AutoCanada Overview A Leading North American Multi-Location Automobile Dealership Group At a Glance1 • One of Canada’s largest multi-location 60 18 automobile dealership groups with ~4,000 Franchises in Canada Franchises in Illinois, U.S. employees • Only publicly listed auto dealership group in Can
Slide 6: Investment Highlights
Investment Highlights Large and Highly Fragmented Canadian Resilient Strong Stewards Market with Significant Business Model of Capital Consolidation Opportunities Accelerated Growth Through Complete Business Model Significant Experienced First Mover Advantage Organic Growth Leadership with Canadian
Slide 7: Attractive Canadian Market
Attractive Canadian Market 3,359 Dealerships in Canada AutoCanada NEW 2% VEHICLE MARKET Other Dealers 98% $244 BILLION + 1.6 Million New Vehicles MARKET 3.0 Million Used Vehicles Franchised New Car Used Car Dealers USED Dealers 31% 34% VEHICLE MARKET SHARE AutoCanada 1% Private Parties 34% 7 Source:
Slide 8: Stable Canadian Automotive Markets
Stable Canadian Automotive Markets Resilient Business Model Historically Stable Growing New and Used Retail Vehicle Sales in Canada1 ($M) • Consumers continue to buy more vehicles every • Increase in first-time buyers supports increasing year, further supporting our continued growth used vehicle sal
Slide 9: Revenue Diversity Across Brands and Geographies
Revenue Diversity Across Brands and Geographies Resilient Business Model % of AutoCanada Revenue by Region 1 AUTOCANADA CANADIAN NEW VEHICLE MIX Segment Brand Segment Brand % Revenue % Acura, Honda, 1% BC Kia % 23.6% 13.0% 12.6 Hyundai 9% AB Nissan 5% 23.1% MB (excl. Calgary) Import 26% Infiniti 1%
Slide 10: Dealership Locations and Brands
Dealership Locations and Brands Resilient Business Model AutoCanada Owns Some of the Best Performing Dealerships in Canada British Columbia Alberta Dealership Awards1 Abbotsford Volkswagen Airdrie Dodge Fish Creek Nissan Grande Prairie Volkswagen Ponoka Chrysler Chilliwack Volkswagen Capital Jeep Do
Slide 11: Profitable Product Mix & Diverse Earnings Streams Provide Stability
Profitable Product Mix & Diverse Earnings Streams Provide Stability Resilient Business Model New Used PS&CR F&I 6% 16% 10% 30% 62% 42% Go Forward initiatives 32% focused on higher margin 84% segments 17% 42% 38% 21% REVENUE1 GROSS PROFIT1 16% of our revenue drives 62% of gross profit 1 As at Decembe
Slide 12: Growth Levers
Growth Levers Strategic Growth Initiatives Driving Industry-leading Performance 1 New Vehicles 2 Used Vehicles Finance & CAPITAL ALLOCATION PRIORITIES Insurance 3 RightRide M&A 4 Collision Used Digital Business Rocket Boosters 5 Intelligence Parts & Service 6 Multiple value creation levers to drive
Slide 13: Drive Growth Through Optimization of Finance & Insurance
Drive Growth Through Optimization of Finance & Insurance Significant Organic Growth Opportunities Resiliency • Dedicated F&I team with in-house training team to educate Same Store1 F&I Gross Profit ($M) dealership network on standardized product portfolio and 55.9 sales process 54.0 46.3 48.4 • Thir
Slide 14: Service Bay Occupancy & Business Development Centre (BDC)
Service Bay Occupancy & Business Development Centre (BDC) Significant Organic Growth Opportunities • BDC is a call centre dedicated to handle all Same Store1 Parts, Service & Collision Repair service work appointment bookings across Gross Profit ($M) our Canadian dealerships 60.2 56.8 54.4 50.4 51.7
Slide 15: Project 50 – Increasing Used Vehicles Sales
Project 50 – Increasing Used Vehicles Sales Significant Organic Growth Opportunities • Additive to new vehicles to grow total unit sales • Drives incremental revenues in high margin business segments (F&I and PS&CR) • Counter-cyclical and protects against recessionary environments • Have sold an ave
Slide 16: RightRide – Fueling Organic Growth
RightRide – Fueling Organic Growth Significant Organic Growth Opportunities • No credit risk retained by AutoCanada • Ability to offer attractive financing products to credit-challenged customers • Geared to today’s economy as well as in a declining economy - Extension of Project 50 • Digital sales
Slide 17: Collision Centre Expansion
Collision Centre Expansion Significant Organic Growth Opportunities • Currently operating 18 locations, predominantly within dealerships • Collision centre operations add to stability of revenues, significant growth opportunity in a $6B market1 • Initiatives include: o Consolidation of existing cent
Slide 18: Generated $107M of Free Cash Flow in 2021
Generated $107M of Free Cash Flow2 in 2021 Improved Net Indebtedness Leverage2 to 1.0x from 1.3x PROVEN ABILITY TO REDUCE LEVERAGE ($M) Debt EBITDA 1 2 NET INDEBTEDNESS LEVERAGE2 Q4 2021 ($M) Floorplan 708.6 Long Term Debt 315.2 Cash on Hand (102.5) Net Indebtedness Plus Floorplan 921.3 Less: Floorp
Slide 19: Capital Allocation Strategy
Capital Allocation Strategy Strong Stewards of Capital • AutoCanada capital allocation aligned with business strategy, growth opportunities and free cash flow profile CAPITAL ALLOCATION PRIORITIES 1 2 3 4 Organic Growth / Internal M&A / Strategic Liability Management Return to Shareholders Investmen
Slide 20: Well Positioned for Industry Consolidation Through Disciplined M&A Strategy
Well Positioned for Industry Consolidation Through Disciplined M&A Strategy Significant Consolidation Opportunities Acquisitions are a key part of • Advance and actively assess strategic acquisition capital allocation strategy opportunities and develop a robust acquisition pipeline Disciplined appro
Slide 21: Acquisitions to Date
Acquisitions to Date Executing on Robust Pipeline of Opportunities Date Company Location Type Description • Collision centre specializing in luxury vehicles including Land Oct. 2020 Auto Bugatti Inc. Montreal, QC Collision Rover, Jaguar, Porsche, Aston Martin,Tesla, BMW, MINI • Luxury dealership wit
Slide 22: Management Team With Proven Track Record Driving Vision & Strategy
Management Team With Proven Track Record Driving Vision & Strategy Experienced Leadership Team Paul Antony Mike Borys Peter Hong Executive Chairman Chief Financial Officer Chief Strategy Officer & General Counsel, Joined May 2018 Joined August 2019 Joined August 2018 • Assumed duties on Board of Dir
Slide 23: Environment, Social & Governance (ESG) Overview
Environment, Social & Governance (ESG) Overview Focus on areas that positively impact our business and society • We are committed to responsible business practices and driving continuous improvement of our operations and our relationships with our employees and the communities in which we live and w
Slide 24: Used Digital Retail Strategy
USED DIGITAL RETAIL STRATEGY
Slide 25: COVID-19 Pandemic Accelerating Consumer Shift to Digital
COVID-19 Pandemic Accelerating Consumer Shift to Digital U.S. eCommerce penetration experienced Increased Focus on Car Ownership and 10 years’ growth in 3 months eCommerce1 93% Using personal cars more often 40% Considering buying a car 33% Moving faster to buy a car due to COVID-19 Open to Car Buyi
Slide 26: Crawl, Walk, Run – Disciplined Approach
Crawl, Walk, Run – Disciplined Approach • First-mover with significant structural advantage – scale, AutoCanada leadership and domain expertise • Attractive market entry with low capital intensity • Drive meaningful improvement beyond current Used to New ratio • Attract consumers earlier in car buyi
Slide 27: In Conclusion – Key Takeaways
In Conclusion – Key Takeaways • Strong progress on building a ‘Complete’ Business Model o Go Forward Plan initiatives taking hold, driving resiliency to deliver top-decile performance in any economic environment • Strengthened balance sheet and capital structure supports ample dry powder to take adv
Slide 28: Q4 2021 Results
Q4 2021 RESULTS
Slide 29: Q4 2021 Results Overview
Q4 2021 Results Overview Record Fourth Quarter Results • Revenue was highest fourth quarter revenue reported in Company’s history • Consolidated used to new retail unit ratio2 improved to 1.45 from 0.86 last year; TTM improved to 1.36 at Q4 2021, moving beyond the targeted annual 1.0 ratio • Net inc
Slide 30: Q4 2021 Results Continued
Q4 2021 Results Continued Record Setting Fourth Quarter ($M, unless otherwise noted) Q4 2021 Q4 2020 Change Consolidated Revenue 1,195.8 876.1 37% Gross Profit %1 19.1% 17.4% +1.7 ppts Adjusted EBITDA2 65.9 40.5 63% Adjusted EBITDA2 % 5.5% 4.6% + 0.9 ppts Adjusted EBITDA on a pre-IFRS 16 basis2 53.5
Slide 31: 2021 Performance vs 2019
2021 Performance vs 2019 2021 Results Compared to 2019 Highlights Improvement Over Last 3 Years ($M, unless otherwise noted) 2021 2019 Change Consolidated Revenue 4,653.4 3,476.1 +1,117.3 Adjusted EBITDA on a pre-IFRS 16 basis1 206.6 59.9 +146.7 Adjusted EBITDA on a pre-IFRS 16 basis1 % 4.4% 1.7% +2
Slide 32: Q4 2021 Results Continued: Canadian Operations
Q4 2021 Results Continued Canadian Operations Results - Used & F&I Key Drivers • Revenue was $998.8 million, an increase of 28.3% • Used to new retail units ratio1 increased to 1.45 from 0.93, with used retail vehicle1 sales bringing total retail vehicle1 growth to 18% • F&I continuing to perform -
Slide 33: Q4 2021 Results Continued: U.S. Operations
Q4 2021 Results Continued U.S. Operations Results – Another Breakout Quarter, Exceptional Performance • New U.S. management (Q2 2021) continues to positively impact performance • Total retail vehicles1 sales increased by 76.2% driven by focus on used retail vehicles1 sales, which were up by 226% • F
Slide 34: Free Cash Flow
Free Cash Flow1 Strong and Consistent Free Cash Flow1 Generation Over the Past Ten Quarters • 2020 impacted by government assistance benefit of $35.5 million ($M) 75 131.4 TTM 107.2 TTM 67.8 52.6 53.4 50 25 19.2 19.4 12.4 7.6 6.2 0 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 1 See “NON-GAAP AND
Slide 35: Appendix
APPENDIX
Slide 36: Supplemental Information
Supplemental Information Adjusted EBITDA1 Reconciliation $M Q4 2021 Q4 2020 Q4 2019 Net (loss) income 69 24 (17) Addback: Income taxes 25 8 (8) Depreciation and amortization 12 11 12 Interest charges 13 9 9 119 52 (4) Addback: (Recovery) Impairment of non-financial assets, net (40) (11) 24 Financing
Slide 37: Thank You
AUTOCANADA THANK YOU INVESTORS.AUTOCAN.CA