Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q2 2023 Earnings Presentation
40 slides from Sonic Automotive's earnings presentation, Jul 27, 2023
Slide 1: Sonic Automotive Investor Presentation Second Quarter 2023
® Sonic Automotive – Investor Presentation Second Quarter 2023 Updated July 27, 2023
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 146 25+ 20 16 $14.0 Billion $2.3 Billion 103K New Vehicles Sold 173K 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 Dealerships Segment Unique, High Return Potential EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship Between Operating Segments Disciplined Capital Allocation To Drive Shareholder Returns F
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 26% CA 22% CO 8% TN 7% ID 6% FL 6% AL 5% NC 4% GA 4% VA 2% MD 2% SC 2% All Others 6% 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 the Year Ended December 31, 2022 5% 29% 11% 34% 43% 8% 41% 29% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance
Slide 8: EchoPark Automotive – A Unique Growth Story
8 ® EchoPark Automotive – A Unique Growth Story Planned Nationwide Distribution Network At Maturity Unique, High Return Potential Business Model Focus On High Quality Pre-Owned Vehicles, In-Store or Online Plan To Reach 90% Of U.S. Population At Maturity Priced Up To $3,000 Below Market With Simplif
Slide 9: Strategic Focus
9 Strategic Focus • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distributio
Slide 10: Strong Balance Sheet And Liquidity
10 Strong Balance Sheet And Liquidity June 30, 2023 December 31, 2022 (In Millions) Cash and cash equivalents 119.7$ 229.2$ Floor plan deposit balance 287.0 272.0 Availability under the 2021 Revolving Credit Facility 289.0 292.9 Availability under the 2019 Mortgage Facility 173.0 - Total available l
Slide 11: Share Repurchase Update
11 Share Repurchase Update ($ in Millions) Share Repurchase Authorization Remaining at December 31, 2022 464.3$ YTD 2023 Share Repurchase Activity (90.7) Remaining Authorization 373.6$ 43.1 41.8 40.7 36.2 35.4 30.0 35.0 40.0 45.0 Dec 2019 Dec 2020 Dec 2021 Dec 2022 Jun 2023 (T ot al C la ss A a nd C
Slide 12: Franchised Dealerships
12 Franchised Dealerships
Slide 13: Franchised Dealerships
13 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships108 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers16 18 States Stab
Slide 14: Franchised Dealerships – Geographic Footprint
14 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 108 Stores, 25+ Brands, 16 Collision Repair Centers
Slide 15: Franchised Dealerships – Strategic Growth Levers
15 Franchised Dealerships – Strategic Growth Levers Mature Cash Flows + 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
Slide 16: EchoPark
16 EchoPark
Slide 17: EchoPark – Brand Promise
17 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality Pre-Owned Vehicles With Available Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Ev
Slide 18: EchoPark – Planned Nationwide Distribution Network
18 EchoPark – Planned Nationwide Distribution Network Target 90% Population Coverage At Maturity Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Suspended Operations Expected Coverage Area Existing Retail Hub
Slide 19: EchoPark – Addressable Market Opportunity
19 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit Core1-4-Year-Old Model In Existing EchoPark Markets Plan To Achieve 90% Population Coverage At Maturity Once Market Conditions Improve Target 10% Market Share Already Achieving This Share* In Most Mature Market Priced Up to $3
Slide 20: EchoPark – Industry Headwinds & Action Plan
20 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Continues To Suppress New Vehicle Production And Inventory Levels – Began To Ease In Q1 2023 But Nearly-New Vehicle Sourcing Challenges Are Expected To Persist Beyond 2023 • Elevated Used Prices And Interest
Slide 21: EchoPark Segment – Growth Path
21 EchoPark Segment – 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 14,931 16,496 15,245 17,435 19,980 17,084 $- $100 $200 $300 $400 $500 $600 $700 (In M illi o
Slide 22: EchoPark Segment – Adjusted EBITDA Trend
22 EchoPark Segment – Adjusted EBITDA Trend $4.9 $4.9 $6.4 $5.3 $5.2 $5.6 $3.2 ($3.6) $5.3 ($10.9) ($30.5) ($19.2) ($36.2) ($30.8) ($23.7) ($24.1) ($24.4) ($27.3) $0.7 $0.9 $1.5 $2.0 $4.6 $6.7 $3.4 $0.5 $(1.3) $(12.5) $(4.5) $(40) $(30) $(20) $(10) $- $10 Q 1 2019 Q 2 2019 Q 3 2019 Q 4 2019 Q 1 2020
Slide 23: Powersports
23 Powersports
Slide 24: Powersports – Opportunistic Growth
24 Powersports – Opportunistic Growth • Growth Via Acquisition At Attractive Earnings Multiples • Consolidation Opportunity In A $34 Billion Market* Where 85% Of U.S. Dealers Own A Single Location • Drive Profitability Enhancement Through Technology And Process Development • Generate Higher Margins
Slide 25: Omnichannel Strategy
25 Omnichannel Strategy
Slide 26: Buy & Sell Your Way
26 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 27: New EchoPark.com Results to Date
27 New EchoPark.com Results to Date Rolled Out To 100% Of National Web Traffic In June 2022 Conversion Rate 30% Higher Compared To Old Website Q2 2023 F&I of $2,025 Per Unit Exceeding Projections For End-To-End Online F&I Product Sales Over 30% Of Vehicles Sold Out Of Market In Q2 2023, Driving Incr
Slide 28: Appendix
28 Appendix
Slide 29: GAAP Income Statement Annual Trend – Consolidated
29 GAAP Income Statement Annual Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts FY 2022 Better / (Worse) % Change (In millions, except unit, per unit, and per share data) FY 2022 FY 2021 FY 202
Slide 30: Non-GAAP Reconciliation – Annual Trend – Consolidated
30 Non-GAAP Reconciliation – Annual Trend – Consolidated NM = Not Meaningful Note: Earnings (Loss) Per Share and SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Note: Balance Sheet Amounts Are As Of December 31 For The FY Then Ended, Balance She
Slide 31: GAAP Income Statement Quarterly Trend – Consolidated
31 GAAP Income Statement Quarterly Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions, except unit, per unit, and per share data) Q2 2023 Q1 2023 Q4
Slide 32: Non-GAAP Reconciliation – Quarterly Trend – Consolidated
32 Non-GAAP Reconciliation – Quarterly Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions, except per share data) Q2 2023 Q1
Slide 33: GAAP Income Statement – Quarterly Trend – Franchised Dealerships Segment
33 GAAP Income Statement – Quarterly Trend – Franchised Dealerships Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 S
Slide 34: Non-GAAP Reconciliation – Quarterly Trend – Franchised Dealerships Segment
34 Non-GAAP Reconciliation – Quarterly Trend – Franchised Dealerships Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Sequen
Slide 35: GAAP Income Statement – Quarterly Trend – EchoPark Segment
35 GAAP Income Statement – Quarterly Trend – EchoPark Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Sequential Year
Slide 36: Non-GAAP Reconciliation – Quarterly Trend – EchoPark Segment
36 Non-GAAP Reconciliation – Quarterly Trend – EchoPark Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Sequential Year-Over
Slide 37: GAAP Income Statement – Quarterly Trend – Powersports Segment
37 GAAP Income Statement – Quarterly Trend – Powersports Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Sequential Y
Slide 38: Non-GAAP Reconciliation – Quarterly Trend – Powersports Segment
38 Non-GAAP Reconciliation – Quarterly Trend – Powersports Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q2 2023 Better / (Worse) % Change (In millions) Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 Sequential Year-O
Slide 39: Non-GAAP Reconciliation – Adjusted EBITDA – EchoPark Segment
39 Non-GAAP Reconciliation – Adjusted EBITDA – EchoPark Segment (In millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Income (loss) before taxes 0.2$ 1.7$ 2.1$ (14.5)$ 2.1$ 2.6$ 0.2$ (0.8)$ 2.0$ Non-floor plan interest 0.5 0.4 0.5 0.4 0.4 0.2 0.1 0.2 0.4 Depreciation
Slide 40: Investor Relations Contact
® Investor Relations Contact: Danny Wieland, Vice President, Investor Relations & Financial Reporting Sonic Automotive Inc. (NYSE: SAH) Email: ir@sonicautomotive.com Investor Relations Website: ir.sonicautomotive.com