Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Q3 2023 Earnings Presentation
29 slides from Group 1 Automotive's earnings presentation, Oct 25, 2023
Slide 1: Third Quarter 2023 Financial Results
Third Quarter 2023 Financial Results Investor Presentation October 25, 2023 Page 1
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: Why Group 1?
Why Group 1? CONSISTENT PROFITABILITY FLEXIBLE PARTS & SERVICE GEOGRAPHIC DIGITAL & STRONG CASH FLOW CAPITAL ALLOCATION GROWTH OUTPERFORMANCE DIVERSIFICATION INNOVATION Consistent EPS growth Balanced M&A, share repurchases, Consistent outperformance of the #1 automotive retailer in the state
Slide 4: Diversified Geographic Footprint
Diversified Geographic Footprint Worldwide* 201 Dealerships 269 Franchises 41 Collision Centers Maine (4) New Hampshire (5) 35 Brands United States Boston Metro (19) 17 States NYC Metro (4) 146 Dealerships Philadelphia (1) Atlantic City (2) 81% of New Vehicle Unit Sales* Annapolis (2) Sacramento (2)
Slide 5: Exposure to Strong Economic Growth
Exposure to Strong Economic Growth Group 1 will continue to benefit from Texas’s sustained economic growth Texas continues to be the fastest growing state in the U.S.1 is the Texas is the leading destination for companies relocating from other states.2 #1 Auto Retailer in Texas Texas is the #1 U.S.
Slide 6: Business Diversification
Business Diversification Parts & Service business provides stability in economic cycles Revenue* Gross Profit* Parts & Service is the heart of Group 1’s ~45% 4% business model and generates of total gross profit 13% 27% 2023 Fixed Absorption ~110%* 31% Finance & Insurance Parts & Service 45% Used Ve
Slide 7: Brand Diversification
Brand Diversification Brand diversity reduces risk from evolving consumer preferences 19% New Vehicle Brand Mix 3Q23 YTD Revenue Mix Unit Mix 23% 20% 34% 45% 11% 43% 35% 9% 9% Import Luxury Domestic Import Luxury Domestic 8% 6% 6% 6% 5% 4% 4% 4% 3% 2% 2% 2% <1% Other *Based on units sold; may not ad
Slide 8: Transformational Growth Strategy
Transformational Growth Strategy Key focus is growing the company through acquisitions and returning capital to shareholders $4.5B in acquired revenues since the beginning of 2021 Capital Allocation Fragmented U.S. market – top 10 dealer groups sell 10% of industry units Repurchased 4.7 mill
Slide 9: Balanced Capital Allocation
Balanced Capital Allocation 2019-20 2021 2022 2023 YTD Acquisitions: Acquisitions: Acquisitions: Acquisitions: $430M $2.5B $940M $1.1B (15 franchises) (58 franchises) (11 franchises) (9 franchises) M&A Dispositions: Dispositions: Dispositions: Dispositions: $300M $155M $265M(1) $375M Capex: Capex: C
Slide 10: Parts & Service Overview
3Q23 YTD U.S. SS P&S Sales Parts & Service Overview +9.8%YoY Service-to Service Retention by Model Year* Stability of free cash flow through economic cycles. Above sector-average growth through our strategic emphasis on customer service; 3Q23 total Parts & Service revenues set record for 10th consec
Slide 11: Battery Electric Vehicle Parts and Service Outlook
Battery Electric Vehicle Parts and Service Outlook Our dealerships are equipped to service all powertrain types Group 1 is investing in We are adding EV lifts, We are equipping collision Multiple collision the tooling & battery replace & repair centers in metro areas to centers have been technician
Slide 12: Battery Electric Vehicle Parts and Service Outlook
Battery Electric Vehicle Parts and Service Outlook Our dealerships are equipped to service all powertrain types According to Edmunds.com 5-year repair and maintenance cost of ownership Group 1’s analysis shows that we generate more revenue per repair order for vehicles with alternative powertrains.
Slide 13: AcceleRide Digital Platform Summary
AcceleRide Digital Platform Summary Buy A Ride Sell A Ride AcceleRide drives Inventory selection of new, used, and CPO provides Instant cash offer customer loyalty, retention, identical user experience and employee efficiencies Offer valid for 7 days or 250 miles Digital credit applications with aut
Slide 14: Digital Innovation
Digital Innovation AcceleRide Aftersales AcceleRide allows us to reach more customers & Platform Interactions Salesperson Productivity Online Service Appointments drives loyalty after the sale 80% +30% 36% Penetration Customers engaged with AcceleRide during transaction As compared to pre-covid leve
Slide 15: Used Vehicle Overview
Used Vehicle Overview GPI Outperforms the Used Vehicle Industry 2023 YTD GPI U.S. Same Store Unit Sales: Flat YoY FY22 U.S. Used Market Unit Sales: -10% YoY Total Used Vehicle U.S. Used Market Revenues ($MM)* Size1 (MM) U.S. Market Share2 41 Annual Used Vehicle Units +11.6% 40 40 2016-2022 CAGR 39 3
Slide 16: Finance & Insurance Overview
Finance & Insurance Overview 3Q23 U.S. Same Store F&I GP PRU: 3Q23 flat vs 2Q23 Improved F&I profitability via focus on compliance & growth includes: U.S. F&I Gross $2,428 Profit Per Retail $2,335 Unit (PRU) $2,155 Consolidation of lender base $1,951 $1,782 Integration of compliance, training and $1
Slide 17: Structurally Lower SG&A % of GP
Structurally Lower SG&A % of GP 950 Basis Point Improvement vs 3Q19 63.4% - 3Q23 Total Adjusted SG&A % of GP* We continue to fully leverage our scale and cost structure 72.9% - 3Q19 Total Adjusted SG&A % of GP* 3Q23 3Q19 4.2% Technology drives customer and employee 2.8% 6.1% efficiencies 5.0% 15.5%
Slide 18: Debt & Interest Rate Exposure
Debt & Interest Rate Exposure ~65% fixed rate debt including floorplan Group 1’s total debt including floorplan was $3.4B: Debt Maturities ~$1,240 million of floorplan debt excludes floorplan $1,000M ~$770 million of mortgage debt ~$750 million of bond debt $750M ~$325 million of acquisition line de
Slide 19: Real Estate Strategy
Real Estate Strategy Dealership Property Breakdown by Region (as of September 30, 2023) Dealerships Region Owned Leased GPI is shifting toward United States 108 37 owning more real estate: United Kingdom 25 30 Total 133 67 Control of dealership real estate is a strong strategic asset Ownership means
Slide 20: 2022 ESG highlights
2022 ESG highlights First U.S. Greenhouse Gas Our Chief Diversity Officer who Completed an ESG Materiality Installed over 2,000 solar panels provides executive oversight of Over 600 health and (GHG) inventory analysis Assessment that identified key in 2022; with a grand total of over diversity, equit
Slide 21: Group 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 Director Manufacturer and Automotive SVP, Aftersales Automotive-related Experience Retailing Experience Daniel McHenry Joined
Slide 22: 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 23: Conclusion
Conclusion Completion of $4.5B in acquired revenues State-of-the-Art digital retailing platform has since the beginning of 2021 and strategic grown significantly and allows for much divestiture of Brazil operations in July 2022 lower cost structure as it gains scale Flexible & balanced capital alloc
Slide 24: Appendix & Non-GAAP Reconciliations
Appendix & Non-GAAP Reconciliations Page 24
Slide 25: 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 26: Reconciliation: Adjusted Cash Flow (Non-GAAP)
Reconciliation: Adjusted Cash Flow (Non-GAAP) YTD (unaudited, $MM) 2016 2017 2018 2019 2020 2021 2022 2023 Operating Cash Flow (GAAP) $ 384 $ 197 $ 270 $ 371 $ 805 $ 1,260 $ 586 $ 393 Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset account and net acquisit
Slide 27: Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP) YTD (unaudited) 2016 2017 2018 2019 2020 2021 2022 2023 As Reported EPS $ 6.67 $ 10.08 $ 7.83 $ 9.34 $ 15.51 $ 30.11 $ 47.14 $ 34.79 After Tax Adjustments: Asset impairments and accelerated depreciation 0.93 0.59 1.65 0.94 1.69 0.07 0.10 0
Slide 28: Reconciliation: Adjusted SG&A (Non-GAAP)
Reconciliation: Adjusted SG&A (Non-GAAP) (unaudited, $MM) 3Q19 3Q23 SG&A Expenses - GAAP $ 342.9 $ 496.7 (Gain) loss on real estate and dealership transactions (1.3) 7.9 Catastrophic Events (11.9) (1.5) Legal items and other professional fees - (4.4) SG&A Expenses - Non-GAAP $ 329.7 $ 498.8 GAAP SG&
Slide 29: group1auto.com
group1auto.com Page 29