Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q3 2019 Earnings Presentation
34 slides from Penske Automotive's earnings presentation, Oct 29, 2019
Slide 1: Third Quarter 2019 Financial Results & Update
Third 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: Diversification
Diversification FRANCHISED AUTOMOTIVE DEALERSHIPS RETAIL COMMERCIAL LEASING, RENTAL & 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.
Slide 4: Dealerships Named Best To Work
33 Dealerships Named “Best To Work” Audi Turnersville Named #1 Best To Work For 4
Slide 5: Revenue and Earnings History
Revenue and Earnings History REVENUE INCOME $22.8 $21.4 $613.6 $20.1 $19.3 $470.5 $243.4 $17.2 $11.6 $458.9 $14.5 $370.2 $12.9 $344.0 $329.6 $10.9 $301.4 $9.7 $247.0 $194.2 $172.4 $119.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2010 2011 2012 2013 2014 2015 2016 2017 2018 Tax Benefit* *Tax benef
Slide 6: 9M Revenue & EBT
9M Revenue & EBT Revenue Revenue Earnings Before Tax $17.3 Billion $17.3 Billion $452 Million 8% 14% 34% 58% 89% 3% 59% 27% 8% Retail North America Retail Commercial Other* Automotive United Kingdom Truck Other *Includes equity income from joint venture investments, including Penske Truck Leasing 6
Slide 7: 9M Service & Parts Gross Profit
9M Service & Parts Gross Profit Service & Parts Generated 45.8% of Total Gross Profit ($ in Millions) Service/Parts Gross Profit Retail Automotive $981.4 Retail Commercial Truck $128.6 Australia/New Zealand $76.1 Total Service & Parts Gross $1,186.1 Total Gross Profit $2,589.0 Service & Parts (as a
Slide 8: 9M 2019 Cash Flow From Operations
9M 2019 Cash Flow From Operations ($ in Millions) Cash Flow From Operations Capital Allocation $182 $661 $174 $188* $97 Acquisitions Cap Ex, Net Cash From Operations Share Repurchases Dividends *Net of seller’s floorplan notes 8
Slide 9: Q3 2019 Financial Review
Q3 2019 FINANCIAL REVIEW PENSE
Slide 10: Third Quarter 2019 Highlights
Third Quarter 2019 Highlights • Record third quarter revenue of $6.0 billion, +5.5% • Selling, General & Administrative (SG&A) expenses as a percentage of Gross Profit declined 30 basis points • Earnings before tax of $158.4, up 0.8% • Earnings per share of $1.42, up 1.4% when compared to adjusted e
Slide 11: Q3 2019 Key Takeaways
Q3 2019 Key Takeaways Franchised Retail Commercial Trucks & Capital Allocation Automotive Penske Truck Leasing • Same-store service • Increased dividend to • 5.5% Same-store $0.41 per share and parts revenue Revenue Growth 6.2%, excluding foreign exchange • Service & Parts generated 68% of • Repurch
Slide 12: Q3 Revenue & EBT
Q3 Revenue & EBT Revenue Revenue Earnings Before Tax $6.0 Billion $6.0 Billion $158 Million 19% 62% 31% 12% 86% 2% 51% 30% 7% Retail North America Retail Commercial Other* Automotive United Kingdom Truck Other *Includes equity income from joint venture investments, including Penske Truck Leasing 12
Slide 13: Q3 2019 Results – Continuing Operations
Q3 2019 Results – Continuing Operations Continuing Operations Change Q3 2019 $ % Revenue $5,967.6 +$309 +5.5% SG&A Expenses $672.8 $10.0 +1.5% SG&A as % of GP 77.4% 77.7% (30 Bps) Operating Income $169.4 +$5.5 +3.4% Earnings Before Taxes $158.4 +$1.3 +0.8% 13
Slide 14: Q3 2019 Same-Store Retail Revenue
Q3 2019 Same-Store Retail Revenue Franchised Retail Automotive Dealerships Reported Excl. F/x New Vehicles (0.2%) +1.8% Used Vehicles --- +3.0% Finance & Insurance +5.0% +7.6% Warranty +10.6% Service & Parts +4.3% +6.2% Customer Pay +4.6% Total +0.5% +2.9% 14
Slide 15: Q3 2019 Retail Automotive Key Metrics
Q3 2019 Retail Automotive Key Metrics Same-Store Metrics Q3 ’19 Q3 ’18 Change Volume Metrics New Units 56,573 57,819 (2.2%) Used Retail Units 73,261 70,881 +3.4% Used to New Ratio 1.30 1.26 --- Margin Metrics New Margin 7.0% 7.7% -70 Bps Used Margin 4.9% 5.8% -90 Bps Service & Parts Margin 59.1% 59.
Slide 16: Q3 2019 Gross Profit (Same-Store)
Q3 2019 Gross Profit (Same-Store) U.S. Q3 ’19 Q3 ’18 Change Excl F/X New Vehicle $2,694 $2,629 +$65 NA Used Vehicle $1,581 $1,612 ($31) NA F&I $1,395 $1,290 +$105 NA Variable Gross(1) $3,556 $3,438 +$118 NA International Q3 ’19 Q3 ’18 Change Excl F/X New Vehicle $3,078 $3,710 ($632) ($464) Used Vehi
Slide 17: Used Supercenters
USED SUPERCENTERS PENSE
Slide 18: Used Vehicle SuperCenters
Used Vehicle SuperCenters Q3 ‘19 Q3 ‘18 Chg. Chg. % Used Units Retailed 19,728 18,568 1,160 +6.2% Revenue (in millions) $327.6 $329.7 ($2.1) (0.6%) Avg. Transaction Price $14,121 $14,800 ($679) (4.6%) Total Variable Gross/Unit $1,760 $2,046 ($286) (14.0%) • U.S. $2,995 $2,875 +$120 +4.2% • U.K. $1,4
Slide 19: Used Vehicle SuperCenters Revenue & Gross
Used Vehicle SuperCenters Revenue & Gross (Q3 2019) Revenue Gross Profit 1% 7% 31% 85% 51% 7% 1% 17% Used Wholesale F&I S&P 19
Slide 20: Commercial Trucks
COMMERCIAL TRUCKS PENSE
Slide 21: Q3 2019 Retail Truck Key Metrics
Q3 2019 Retail Truck Key Metrics Q3 ’19 Q3 ’18 Chg Chg % Volume Metrics New Retail Units 4,154 2,431 +1,723 +70.9% Used Retail Units 578 579 (1) (0.2%) Gross Per Unit New Vehicle $5,244 $4,952 +$292 +5.9% Used Vehicle $5,684 $6,986 ($1,302) (18.6%) F&I $658 $948 ($290) (30.6%) 21
Slide 22: Retail Commercial Truck Revenue & Gross
Retail Commercial Truck Revenue & Gross Q3 2019 64% of Gross Profit From Service & Parts Revenue Gross Profit 5% 4% 22% 25% 69% 64% 3% 4% New Used S&P F&I Other 22
Slide 23: Penske Transportation Solutions
PENSKE TRANSPORTATON SOLUTIONS
Slide 24: Penske Transportation Solutions Overview
Penske Transportation Solutions Overview Full-Service Contract Truck Logistics Leasing Maintenance Rental Services • $15.9 billion total assets Operating Revenue • $8.8 billion in estimated total Logistics annual revenue 27% 46% • Over 327,000 vehicles on the road 27% • PAG recorded equity income of
Slide 25: PTL Performance Summary
PTL Performance Summary Q3 Total Revenue Q3 Net Income ($ in Billions) ($ in Millions) $2.2 $2.3 $141 $146 $1.8 $124 Q3 '17 Q3 '18 Q3 '19 Q3 '17 Q3 '18 Q3 '19 25
Slide 26: Digital Initiatives
DIGITAL INITIATIVES PENSE
Slide 27: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • 58,000 new and used vehicles available online via websites and social channels • Provide, chat, text, mobile, desktop opportunity, including service appointment scheduling, online payments and vehicle purchase through Preferred Purchase • 37% of U.S. unit sales are
Slide 28: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • Real-time status updates & online approvals • Online service appointments up 19% in Q3 2019 • Online service/parts payments up 73% in Q3 2019 Here are your CAMRY’s inspection results: 28
Slide 29: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • Installing docuPAD in U.S. dealerships • Digital customer engagement in the F&I office through menu presentation and document processing • Electronic documents provided to customer • In the process of launching (occurring in multiple stages) a new e-commerce platfo
Slide 30: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS PENSE
Slide 31: Income/EPS from Continuing Operations
Income/EPS from Continuing Operations ($ in Millions, except per share amounts) The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three months and nine months ended Se
Slide 32: EBITDA Reconciliation
EBITDA Reconciliation ($ in Millions) Q3 ’19 Q3 ’18 9M ’19 9M ’18 Net Income $116.1 $130.1 $333.8 $373.1 Depreciation $27.5 $25.9 $81.0 $77.2 Other Interest $32.9 $28.3 $93.2 $86.7 Income Taxes $42.4 $27.1 $118.6 $104.7 (Income)/Loss from Disc. Ops. ($0.1) ($0.1) ($0.3) ($0.2) EBITDA $218.8 $211.3 $
Slide 33: Consolidated Non-GAAP Reconciliations
Consolidated Non-GAAP Reconciliations The following tables reconcile reported income tax expense for the three and nine months ended September 30, 2019 and 2018: Three Months Ended September 30, 2019 vs. 2018 2019 2018 Change % Change Tax Expense $42.4 $27.1 +$15.3 56.5% Add: Income Tax Benefit(1) -
Slide 34: Automotive
Automotive
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