Slide 1: AutoCanada Investor Presentation Q3 2022
AUTOCANADA INVESTOR PRESENTATION Q3 2022 NOVEMBER 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 automobile dealership groups with ~4,000 employees 63 18 Franchises in Canada Franchises in Illinois, U.S. • Only publicly listed auto dealership group in Can
Slide 6: Investment Highlights
Investment Highlights Large and Highly Fragmented Canadian Market with Significant Resilient Business Model Strong Stewards of Capital Consolidation Opportunities Accelerated Growth Through Complete Business Model Experienced First Mover Advantage Significant Organic Leadership Team with Canadian Di
Slide 7: Attractive Canadian Market
Attractive Canadian Market 3,359 Dealerships in Canada AutoCanada NEW 2% VEHICLE MARKET Other Dealers 98% $244 BILLION + 1.6 Million New Vehicles 3.1 Million Used Vehicles MARKET USED Private Franchised New VEHICLE Parties 33% Car Dealers 35% MARKET SHARE AutoCanada 2% Used Car Dealers 31% 7 Source:
Slide 8: Revenue Diversity Across Brands and Geographies
Revenue Diversity Across Brands and Geographies Resilient Business Model AUTOCANADA CANADIAN NEW VEHICLE MIX1 % of AutoCanada Revenue by Region 1 Segment Segment % Brand Brand Revenue % Acura 1% Honda 4% AB 12.8% Hyundai 9% BC (excl. Calgary) Infiniti 1% 10.4% SK MB 6.6% Kia 2% Import 31% 6.4% Mazda
Slide 9: Profitable Product Mix & Diverse Earnings Streams Provide Stability
Profitable Product Mix & Diverse Earnings Streams Provide Stability Resilient Business Model New Used PS&CR F&I 6% 16% 10% 34% 66% F&I, PS&CR initiatives focused on 48% higher margin segments 32% 84% 13% 36% 34% 21% REVENUE1 GROSS PROFIT1 16% of our revenue drives 66% of gross profit 1 Trailing twel
Slide 10: Growth Pillars
Growth Pillars Strategic Growth Initiatives Driving Industry-Leading Performance GROWTH PILLARS Finance & Insurance (amplifies all pillars) RightRide Parts New Used & Collision & M&A Vehicles Vehicles Used Service Digital Data Analytics Multiple Value Creation Pillars to Drive Enterprise Value 10
Slide 11: Drive Growth Through Optimization of Finance & Insurance
Drive Growth Through Optimization of Finance & Insurance Resilienc y Significant Organic Growth Opportunities • Dedicated and focused F&I team leading efforts across all dealerships Same Store1 F&I Gross Profit ($M) • F&I amplifies gross margin contributions from New and Used Vehicle sales 68.2 66.9
Slide 12: Parts & Service
Parts & Service Significant Organic Growth Opportunities • Leverage centralized call centre (Business Development Centre or “BDC”) Same Store1 Parts, Service & Collision Repair to handle all inbound and outbound service work appointment bookings Gross Profit ($M) 64.6 • Management focus on effective
Slide 13: Increasing Used Vehicles Sales
Increasing Used Vehicles Sales Significant Organic Growth Opportunities • Counter-cyclical to New Vehicle sales; Protects against recessionary environments • Additive to new vehicles to grow total unit sales • While acting as a stabilizer to business model, also acts to drive incremental revenues on
Slide 14: RightRide – Fueling Organic Growth
RightRide – Fueling Organic Growth Significant Organic Growth Opportunities • RightRide offers ability to offer attractive financing products to credit challenged customers (sub and near prime) o No credit risk retained by AutoCanada • Digital sales and marketing strategy enables customers to apply
Slide 15: Collision Centre Expansion
Collision Centre Expansion Significant Organic and Inorganic Growth Opportunities • Dedicated leadership team driving growth by acquiring stand-alone OEM certified collision centres • Leverage geographic areas where we have multiple dealerships, enabling a “hub and spoke” model • Inherent synergies
Slide 16: Used Digital
Used Digital Supporting Omnichannel Offering with RightRide Footprint • Used Digital strategy complimentary to existing Complete Business Model • Seamless omnichannel buying experience for customers that supports in-store and online requirements for used vehicles • Development of national network of
Slide 17: Generated $112M of Free Cash Flow Q3 2022 TTM
Generated $112M of Free Cash Flow1 Q3 2022 TTM Net Indebtedness Leverage1 of 1.5x DISCIPLINED MANAGEMENT OF LEVERAGE Debt EBITDA 2 1 1 NET INDEBTEDNESS LEVERAGE1 Q3 2022 ($M) Floorplan 951.9 Long Term Debt 460.3 Cash on Hand (109.5) Net Indebtedness Plus Floorplan 1,302.7 Less: Floorplan 951.9 Net I
Slide 18: 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 19: 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 20: Acquisitions to Date
Acquisitions to Date Executing on Robust Pipeline of Opportunities Date Company Location Type Description Oct. 2020 Auto Bugatti Inc. Montreal, QC Collision • Collision centre specializing in luxury vehicles Oct. 2020 Autohaus of Peoria Peoria, IL U.S. • Luxury dealership with franchise rights for P
Slide 21: Management Team With Proven Track Record Driving Vision & Strategy
Management Team With Proven Track Record Driving Vision & Strategy Recently Expanded Leadership Team v v v Paul Antony Mike Borys Peter Hong Jeffrey Thorpe Brian Feldman Lee Wittick Executive Chairman Chief Financial Officer Chief Strategy Officer & General President, Canadian Operations Senior Vice
Slide 22: 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 23: In Conclusion – Key Takeaways
In Conclusion – Key Takeaways • We have executed well on building out our ‘Complete’ Business Model o Progress on initiatives to grow New, Used, F&I, and PS&CR driving resiliency, sustainability to deliver top decile performance in any economic environment o Chip shortage, expanded margin profile an
Slide 24: Q3 2022 Results
Q3 2022 RESULTS
Slide 25: Q3 2022 Results Overview
Q3 2022 Results Overview Record Third Quarter Results • Revenue was highest third quarter revenue reported in Company’s history • Consolidated used to new retail unit ratio2 improved to 1.89 from 1.49 last year; TTM improved to 1.68 at Q3 2022 • Net income for the period was $32.9 million versus $38
Slide 26: Q3 2022 Results Continued
Q3 2022 Results Continued Record Setting Third Quarter ($M, unless otherwise noted) Q3 2022 Q3 2021 Change Consolidated Revenue 1,623.9 1,206.8 35% Gross Profit %1 16.8% 18.2% -1.4 ppts Adjusted EBITDA2 76.4 68.3 12% Adjusted EBITDA2 % 4.7% 5.7% -1.0 ppts Adjusted EBITDA on a pre-IFRS 16 basis2 63.1
Slide 27: Q3 2022 Results Continued: Adjusted EBITDA
Q3 2022 Results Continued Operations Results - Used & F&I Key Drivers CONSOLIDATED ADJUSTED EBITDA1 ($M) 5.7% 5.5% 4.6% 4.5% 4.7% TTM Consolidated Adjusted EBITDA1 $280.0 million 75.6 76.4 68.3 65.9 62.2 TTM Canadian Operations Adjusted EBITDA1 $241.5 million TTM U.S. Operations Adjusted EBITDA -2.2
Slide 28: Appendix
APPENDIX
Slide 29: Dealership Locations and Brands
Dealership Locations and Brands Resilient Business Model AutoCanada Owns Some of the Best Performing Dealerships in Canada British Columbia Alberta Abbotsford Volkswagen Airdrie Dodge Fish Creek Nissan Grande Prairie Volkswagen Ponoka Chrysler Dealership Awards1 Chilliwack Volkswagen Capital Jeep Do
Slide 30: Thank You
AUTOCANADA THANK YOU INVESTORS.AUTOCAN.CA