Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (April 2022)
44 slides from Sonic Automotive's investor presentation, Apr 28, 2022
Slide 1: Sonic Automotive – Investor Presentation April 2022
® Sonic Automotive – Investor Presentation April 2022 Updated April 28, 2022
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our
Slide 3: Company Overview
3 Company Overview
Slide 4: Sonic Automotive: Who We Are
4 ® Sonic Automotive: Who We Are QUICK FACTS (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers 160 25+ 23 17 $12.4 Billion $1.9 Billion 103K New Vehicles Sold 183K Total Revenues Automotive Brands Locations Used Vehicles Sold Collision Centers States Gross Profit
Slide 5: Investment Highlights
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expens
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 28% CA 24% CO 9% TN 8% FL 7% AL 5% GA 4% NC 4% MD 2% SC 2% VA 2% NV 2% All Others 3% Broad Geographic Distribution Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Perce
Slide 7: Revenue Composition – Diversified Revenue Streams
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2021 5% 33% 11% 35% 42% 7% 42% 25% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distributi
Slide 8: EchoPark Automotive – A Unique Growth Story
8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Expected To Reach 90% Of Population By 2025 Unique, High Return Business Model Focus On High Quality 1 to 4-Year-Old Nearly New Vehicles Wide Reach – 30% of Guests Travel More Than 30 Minutes To Shop Our Inventor
Slide 9: Franchised Dealerships and EchoPark: Complementary Relationship
9 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diversified Revenue Streams • Relatively Low Fixed Costs And Multiple Strategic Levers • Further Growth Opportunities: Parts And Se
Slide 10: Strategic Direction
10 Strategic Direction • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distri
Slide 11: Strong Balance Sheet And Liquidity
11 Strong Balance Sheet And Liquidity March 31, 2022 December 31, 2021 (In Millions) Cash and cash equivalents 360.2$ 299.4$ Availability under the 2021 Revolving Credit Facility 274.0 281.4 Availability under the 2019 Mortgage Facility 24.9 22.2 Floor plan deposit balance 125.5 99.8 Total available
Slide 12: EchoPark
12 EchoPark
Slide 13: EchoPark – Brand Promise
13 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality, Low Mileage Vehicles Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Every Vehicle Buy & Sel
Slide 14: EchoPark – Developing Nationwide Distribution Network
14 EchoPark – Developing Nationwide Distribution Network Over 30% Population Coverage To Date Target 90% Population Coverage By 2025 Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Existing Delivery Center Fut
Slide 15: EchoPark – Addressable Market Opportunity
15 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit Model In Existing EchoPark Markets Target 90% Population Coverage By 2025 With Growing Nationwide Distribution Network Target 10% Market Share Already Achieving This Share* In Multiple Markets Priced Up to $3,000 Below Used Co
Slide 16: EchoPark – Growth Forecast
16 EchoPark – Growth Forecast 77,835 575,000 FY 2021 FY 2025E Retail Unit Sales Volume FY 2021 FY 2025E $2.3 $14.0 Total Revenues (In Billions) 56% CAGR $(65.6) $220.0 FY 2021* FY 2025E Adjusted Pre-Tax Profit (Loss) (In Millions) $(46.3) $260.0 FY 2021* FY 2025E Adjusted EBITDA (In Millions) Growth
Slide 17: EchoPark – Modeled 4-Wall Economics At Maturity
17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410,000,0
Slide 18: EchoPark – Delivery Center Model
18 EchoPark – Delivery Center Model Existing Retail Hub Example Delivery Center Market Coverage Opportunity Delivery Center Model • Utilize Nearby Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory Online In Surrounding Markets • Drive Incremental eComm
Slide 19: EchoPark – High Volume Model Drives Superior Returns
19 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark Better / (Worse) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,800 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,600 $2,150 ($1,450) Volume Differential
Slide 20: EchoPark – Industry Headwinds & Action Plan
20 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Driving Low New Vehicle Production And Inventory Levels, Increasing Demand For Used Vehicles At Auction • Rental Car Companies Cannot Source Sufficient New Vehicles Directly, Turned To Used Vehicle Auction Ma
Slide 21: EchoPark – Growth Path
21 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 19,670 21,261 21,255 15,649 14,995 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Quarterly
Slide 22: EchoPark – Adjusted EBITDA Trend
22 EchoPark – Adjusted EBITDA Trend ($2.8) ($1.1) ($3.4) ($2.2) ($3.0) ($2.1) $5.0 $4.8 $6.4 $5.3 $5.2 $5.6 $3.1 ($2.9) $6.2 ($9.4) ($28.5) ($14.6) ($29.0) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(17.9) $(30) $(25) $(20) $(15) $(10) $(5) $- $5 $10 Adjusted EBITDA Less Impact of New St
Slide 23: Franchised Dealerships
23 Franchised Dealerships
Slide 24: Franchised Dealerships
24 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships111 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers17 18 States Stab
Slide 25: Franchised Dealerships – Geographic Footprint
25 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers RFJ Auto Acquisition Closed In December 2021 • 22 Franchised Locations In 6 States, 16 New Vehicle Brands • Added 5 New States, 5 New Brands To Portfolio
Slide 26: Franchised Dealerships – Strategic Growth Levers
26 Franchised Dealerships – Strategic Growth Levers Multiple Growth Drivers Pursue Strategic Acquisitions Opportunities Grow Parts and Service Retention Maximize F&I Penetration High Used Vehicle Volume Throughput Data-Driven Inventory Management Apply EchoPark Learnings Develop Omnichannel Platform
Slide 27: Omnichannel Strategy
27 Omnichannel Strategy
Slide 28: Full Omnichannel Infrastructure
28 Full Omnichannel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary
Slide 29: Buy & Sell Your Way
29 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • In
Slide 30: New EchoPark.com Results to Date
30 New EchoPark.com Results to Date Rolled Out To 80% Of National Traffic With 100% Roll-Out Planned For Q2 2022 Conversion Rate 30% Higher Compared To Old Website F&I of $2,325 Per Unit Exceeding Projections For Online F&I Product Sales Over 70% Of Vehicles Sold Out Of Market, Driving Incremental R
Slide 31: Appendix
31 Appendix
Slide 32: Non-GAAP Reconciliation – Segment Income
32 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q1 2022 Q1 2021 Q1 2022 Q1 2021 Q1 2022 Q1 2021 Revenues 2,961.3$ 2,279.7$ 625.3$ 507.1$ 3,586.6$ 2,786.8$ Gross profit 527.0$ 355.0$ 44.4$ 45.9$ 571.3$ 400.9$ SG&
Slide 33: Non-GAAP Reconciliation – Segment Income
33 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 Revenues 10,051.1$ 8,348.0$ 2,345.3$ 1,419.0$ 12,396.4$ 9,767.0$ Gross profit 1,765.6$ 1,309.4$ 148.8$ 114.0$ 1,914
Slide 34: Non-GAAP Reconciliation – Adjusted EBITDA
34 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 For The FY Then Ended And As Of March 31, 2022 For The LTM Q1 2022 Period. (In millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q1 2022 Net Income (Loss) 51.7$ 144.1$ (51.4)$ 348.9$ 392.0$ Provision For Inco
Slide 35: Non-GAAP Reconciliation – Adjusted EBITDA By Segment
35 Non-GAAP Reconciliation – Adjusted EBITDA By Segment Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 97.3 $ 54.2 Provision For Income Taxes 3
Slide 36: Adjusted EBITDA By Segment Q4 2021 and Q4 2020
36 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 96.3 $ 57.3 Provision For Income Taxes 25.8 32.8 Income (Loss) Before Taxes $ 148.9 $ (26.8)
Slide 37: Adjusted EBITDA By Segment Q2 2021 and Q2 2020
37 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 113.8 $ 30.8 Provision For Income Taxes 37.0 6.3 Income (Loss) Before Taxes $ 165.4 $ (14.4)
Slide 38: Adjusted EBITDA By Segment Q4 2020 and Q4 2019
38 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 57.3 $ 46.3 Provision For Income Taxes 32.8 14.7 Income (Loss) Before Taxes $ 90.6 $ (0.8) $
Slide 39: Adjusted EBITDA By Segment Q2 2020 and Q2 2019
39 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 30.8 $ 26.6 Provision For Income Taxes 6.3 10.0 Income (Loss) Before Taxes $ 34.8 $ 2.6 $ (0.
Slide 40: Adjusted EBITDA By Segment Q4 2019 and Q4 2018
40 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 46.3 $ 21.8 Provision For Income Taxes 14.7 9.2 Income (Loss) Before Taxes $ 75.5 $ (14.5) $
Slide 41: Adjusted EBITDA By Segment Q1 2019 and Q1 2018
41 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 42.2 $ (2.2) Provision For Income Taxes 19.0 (1.9) Income (Loss) Before Taxes $ 61.2 $ 0.2 $
Slide 42: Adjusted EBITDA By Segment Q4 2018 and Q4 2017
42 Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 21.8 $ 62.0 Provision For Income Taxes 9.2 (8.4) Income (Loss) Before Taxes $ 37.4 $ (6.2) $
Slide 43: ® ®
® ®
Slide 44: Investor Relations Contacts
® Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220
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