Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Q3 2024 Earnings Presentation
35 slides from Group 1 Automotive's earnings presentation, Oct 30, 2024
Slide 1: Third Quarter 2024 Financial Results
Third Quarter 2024 Financial Results Investor Presentation October 30, 2024
Slide 2: Forward looking statements
Forward looking statements This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, th
Slide 3: 3Q24 Summary
3Q24 Summary ($MM) 3Q24 Financial Highlights: Total Company Revenues Same Store Revenues + Quarterly record total revenues of $5.2B an increase of 11% YoY + Quarterly record total gross profit of $853M an increase of 8% YoY 16% $660 5% $550 $579 $567 $214 $194 (1%) + Quarterly records for new and us
Slide 4: Consistent Profitability & Strong Cash Flow Portfolio
Consistent Profitability Portfolio Parts & Service Employer of Choice Leading Customer & Strong Cash Flow Optimization Growth within the Auto Experience & Partner of Industry Choice + Continued strong EPS: + Balanced M&A, share + Outperformance of the peer + Our employees are the + Strive to be grea
Slide 5: Cash Flow Summary
Cash Flow Summary + $127 million in capital expenditures year-to- + $138 million in share buybacks year-to-date representing 3% of share date count (1) Adjusted Operating Cash Flow* $916 Adjusted Free Cash Flow* Rent Adjusted Total Liquidity $803 Leverage Ratio ($MM) $755 $720 $656 $581 $795 $813 $5
Slide 6: Portfolio Optimization
Portfolio Optimization 2019-20 2021 2022 2023 2024 YTD(2) Acquisitions: Acquisitions: Acquisitions: Acquisitions: Acquisitions: $430M $2.5B $940M $1.1B $3.9B (15 franchises) (58 franchises) (11 franchises) (9 franchises) (84 franchises) M&A Dispositions: Dispositions: Dispositions: Dispositions: Dis
Slide 7: 2024 U.S. Acquisitions
2024 U.S. Acquisitions Nine dealerships with expected annual revenues of $1.0B + Portfolio Optimization: Following recent disposals of smaller, lower volume dealerships, these acquisitions include higher throughput. + Highly desirable brands: Acquisitions include 2 Lexus, 1 Mercedes-Benz, 1 . Toyota
Slide 8: 2024 U.K. Acquisitions
2024 U.K. Acquisitions 59 dealerships with expected annual revenues of $2.9B + Highly desirable brands: Acquisitions includes Audi, BMW/MINI, Jaguar Land Rover, Lexus, Mercedes-Benz/smart, Porsche, Toyota, Volkswagen and Volkswagen Commercial Vehicles + Choice Locations: Complementing our footprint
Slide 9: Business Diversification
Business Diversification Parts & Service business provides stability in economic cycles Revenue Gross Profit 4% Finance & Insurance Parts & Service is the heart of Group 1’s >40% 13% 26% Parts & Service Used Vehicles business model and generates of total gross profit New Vehicles 34% 3Q24 Fixed Abso
Slide 10: Diversified Geographic Footprint
Diversified Geographic Footprint United Kingdom England & Wales Total U.S. & U.K.* 114 Dealerships 260 Dealerships 22% of New Vehicle Unit Sales* 338 Franchises United States 44 Collision Centers 17 States Maine (4) 35 Brands Lancashire (1) 146 Dealerships New Hampshire (4) Boston Metro (19) Greater
Slide 11: 3Q24 YTD Brand Diversification
3Q24 YTD Brand Diversification Revenue Mix Unit Mix Brand diversity reduces risk from evolving 18% 21% consumer preferences 37% 47% 20% 35% 42% Import Luxury Domestic Import Luxury Domestic 11% 9% 8% 7% 7% 7% 6% 6% 6% 3% 3% 2% 2% 2% 1% <1% Other © Group 1 Automotive 2024. All Rights Reserved. 11
Slide 12: New Vehicle Overview
New Vehicle Overview GPI Outperforms the New Vehicle Industry 2024 YTD GPI U.S. Same Store Retail Unit Sales: +2% YoY 2024 YTD U.S. New Market Retail Unit Sales1: +1% YoY Total New Vehicle U.S. New Market Revenues ($MM)* Size1 (MM) Annual New Vehicle Units +9% 2019-2023 17 18 17 17 17 CAGR 16 15 15
Slide 13: Used Vehicle Overview
Used Vehicle Overview GPI flat with Used Vehicle Industry 2024 YTD GPI U.S. Same Store Retail Unit Sales: +3% YoY 2024 YTD U.S. Used Market Retail Unit Sales1: +3% YoY Total Used Vehicle U.S. Used Market Revenues ($MM)* Size1 (MM) 41 Annual Used Vehicle Units U.S. Market Share2 +13% 2019-2023 CAGR 4
Slide 14: Finance & Insurance Overview
3Q24 YTD U.S. Same Store F&I GP PRU: Finance & Insurance Overview +1% YoY U.S. F&I Gross Profit Per Retail Unit (PRU) $2,428 $2,338 $2,352 Improved F&I Profitability $2,155 via focus on compliance & growth: $1,951 $1,782 + Consolidation of lender base $1,710 $1,647 $1,599 + Integration of compliance
Slide 15: Parts & Service Overview
Parts & Service Overview Strong Financials + Stability of free cash flow through economic cycles + Above sector-average growth through strategic emphasis on customer service Competitive Advantage + Technology: Easy online booking, #1 ranked call center(1) and customer management software improve eff
Slide 16: Parts & Service Overview
Parts & Service Overview Service-to-Service Retention by Model Year* 78% Consolidated P&S 67% 73% 70% 71% 69% 67% 67% 65% 63% 61% Revenue (1) ($MM) 53% +10% 2019-2023 CAGR 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 10+ Yrs Average *Represents vehicles having 2 service visits in 15 months. 3Q2
Slide 17: Battery EV Parts & Service Outlook
Battery EV Parts & Service Outlook Our dealerships are equipped to service all powertrain types + GPI is investing in the tooling & + BEVs still require repairs and technician training for all brands 5-year repair and maintenance maintenance, despite not needing some common low-margin cost of owners
Slide 18: Structurally Lower SG&A % of GP
Structurally Lower SG&A % of GP We continue to fully leverage our scale and cost structure 2024 2019 3Q19 Salesperson Productivity Improvement compared to 2019 20% 3Q24 4.2% Advertising 3.2% 6.1% Rent & Facility 5.7% Other 15.5% Personnel 2024 SS Headcount 15.1% Reduction compared to 2019 (Excludes
Slide 19: Group 1 Leadership Team
Group 1 Leadership Team Daryl Kenningham Joined GP1 July 2011 Mike Jones Joined GP1 April 2007 + 35+ Years Industry Experience + 40+ Years Industry Experience President, CEO and + Manufacturer and Automotive SVP, Aftersales + Automotive-related Experience Retailing Experience Director Daniel McHenry
Slide 20: Group 1's Core Values
Group 1’s Core Values Integrity Transparency Professionalism Teamwork Respect We conduct ourselves with the We promote open and honest We set our standards We put the interest of the group We treat everyone, customers highest level of ethics both communication between each high so that we can exceed
Slide 21: Sustainability Highlights
Sustainability Highlights* 1,035 100% 8,000+ 33,000+ EV charging stations of repair centers Solar panels Employee available at Group 1 equipped for hybrids & installed at Group 1 training hours locations EVs locations completed 44% 53% 16,011 80% / 76% of Group 1 Board of Employee Diversity Team Mem
Slide 22: Appendix
Appendix Third Quarter 2024 Financial Results
Slide 23: Revenue, Adjusted EPS, Adjusted FCF
Revenue* ($MM) Adjusted EPS* Adjusted FCF* ($MM) $17,874 $45.85 $803 $44.24 $16,412 $656 $13,802 $35.02 $581 $12,044 $10,852 $426 $18.06 $237 $10.93 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 +10% +42% +25% CAGR CAGR CAGR *Based on consolidated results; includes Brazi
Slide 24: Income from Operations & Margin Trend
Income from Operations & Margin Trend Adjusted Operating Margin* 6.6% 6.5% 5.7% 5.5% 5.0% 4.9% $1,058 3.4% $991 $893 $769 $702 Adjusted Operating Income* ($MM) $526 395 2019 2020 2021 2022 2023 3Q23 YTD 3Q24 YTD *See Appendix for Non-GAAP Reconciliations © Group 1 Automotive 2024. All Rights Reserve
Slide 25: Debt & Interest Rate Exposure
Debt & Interest Rate Exposure Debt Maturities in millions, excludes floorplan + GPI’s total debt at September 30, 2024 including floorplan was $5.2B: ~$2,270 million of floorplan debt $ 1,157 ~$1,140 million of mortgage debt ~$1,250 million of bond debt $902 ~$170 million of acquisition line debt ~$
Slide 26: Real Estate Strategy
Real Estate Strategy Dealership Property Breakdown by Region (as of September 30, 2024) GPI is shifting toward Dealerships owning more real estate: Region Owned Leased United States 113 33 + Control of dealership real estate is a strong strategic asset United Kingdom 64 49 Total 177 82 + Ownership m
Slide 27: Exposure to Strong Economic Growth
Exposure to Strong Economic Growth Group 1 will continue to benefit from Texas’ sustained economic growth + Texas continues to be the fastest growing state in the U.S. (1) + GPI is the #1 Auto Retailer + Texas is the leading destination for corporate relocation and expansion projects. (2) in Texas +
Slide 28: Non-GAAP Reconciliations
Non-GAAP Reconciliations Third Quarter 2024 Financial Results
Slide 29: Non-GAAP Financial Measures, Same Store Data, and Other Data
Non-GAAP Financial Measures, Same Store Data, and Other Data In addition to evaluating the financial condition and results of our operations in accordance with U.S. GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions
Slide 30: Reconciliation: Adjusted Income from Operations (Non-GAAP)
Reconciliation: Adjusted Income from Operations (Non-GAAP) (Unaudited, $MM) 2019 2020 2021 2022 2023 3Q23 YTD 3Q24 YTD As Reported Income from Operations $358 $496 $884 $1,091 $969 $774 $715 Asset impairments and accelerated depreciation 22 27 2 2 34 9 6 (Gain) loss on real estate and dealership tra
Slide 31: Reconciliation: Adjusted Cash Flow (Non-GAAP)
Reconciliation: Adjusted Cash Flow (Non-GAAP) (Unaudited, $MM) 2019 2020 2021 2022 2023 3Q23 YTD 3Q24 YTD Operating Cash Flow (GAAP) $371 $805 $1,260 $586 $190 $393 $374 Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset account and net (43) (314) (491) 320 5
Slide 32: Reconciliation: Adjusted Continuing Ops Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Continuing Ops Earnings Per Share (Non-GAAP) (Unaudited) 3Q23 3Q24 As Reported EPS from Continuing Ops $11.67 $8.68 After Tax Adjustments: Asset impairments and accelerated depreciation 0.28 0.07 (Gain) loss on real estate and dealership transactions (0.18) 0.01 Catastrophic
Slide 33: Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP) Certain numbers may not compute due to rounding; includes Brazil discontinued operations © Group 1 Automotive 2024. All Rights Reserved. 33
Slide 34: Reconciliation: Adjusted SG&A (Non-GAAP)
Reconciliation: Adjusted SG&A (Non-GAAP) (Unaudited, $MM) 3Q19 3Q24 SG&A Expenses – GAAP $342.9 $591.6 Gain (loss) on real estate and dealership transactions (1.3) 0.6 Catastrophic Events (11.9) (0.7) Legal items and other professional fees - (0.3) Severance Costs - (0.4) Acquisitions costs - (14.8)
Slide 35: Thank you
Thank you www.group1auto.com