Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (July 2021)
48 slides from Sonic Automotive's investor presentation, Jul 29, 2021
Slide 1: Sonic Automotive – Investor Presentation July 2021
® Sonic Automotive – Investor Presentation July 2021 Updated July 29, 2021 Exhibit 99.2
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 116 20+ 14 16 $9.8 Billion $1.4 Billion 93K New Vehicles Sold 159K Total Revenues Automotive Brands Locations Used Vehicles Sold States Collision Centers Gross Profit N
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 26%CO 10% TN 7% FL 7% AL 6% NC 5% GA 3% VA 2% MD 2% SC 2% NV 2% Concentrated in Major Metro Markets Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of To
Slide 7: Revenue Composition – Diversified Revenue Streams
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2020 5% 34% 13% 42% 39% 7%43% 17% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distributio
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 1 to 4-Year-Old Vehicles - Nearly New With Remaining OEM Warranty Wide Reach – 30% of Guests Travel More Than 30 Minutes To Shop Our
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 Omni-Channel Distr
Slide 11: EchoPark
11 EchoPark
Slide 12: EchoPark – Brand Promise
12 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To 10% Below Used Vehicle Market Price High Quality, Low Mileage Vehicle With Existing Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Zero Reported Accidents On C
Slide 13: EchoPark – Developing Nationwide Distribution Network
13 EchoPark – Developing Nationwide Distribution Network 25% Population Coverage By End Of 2021 90% Population Coverage By 2025 Note: Future locations and population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Existing Retail Hub Existing Delivery
Slide 14: EchoPark – Addressable Market Opportunity
14 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 15: EchoPark – 5-Year Growth Forecast
15 EchoPark – 5-Year Growth Forecast 57,161 575,000 FY 2020 FY 2025E Retail Unit Sales Volume FY 2020 FY 2025E $1.4 $14.0 Total Revenues (In Billions) 58% CAGR $221.0 FY 2020 FY 2025E Pre-Tax Profit (Loss) (In Millions) ($1.1) $11.0 $261.0 FY 2020 FY 2025E EBITDA (In Millions) Growth Drivers • Expec
Slide 16: EchoPark – Modeled 4-Wall Economics At Maturity
16 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410,000,0
Slide 17: EchoPark – Delivery Center Model
17 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 18: EchoPark – High Volume Model Drives Superior Returns
18 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 $1,600 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,400 $2,150 ($1,250) Volume Differential F
Slide 19: EchoPark – Growth Path
19 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 $- $100 $200 $300 $400 $500 $600 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q
Slide 20: EchoPark – Adjusted EBITDA Trend
20 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) $6.1 $6.2 $6.8 $4.8 ($0.3) $6.7 ($4.0) ($10.0) ($8.0) ($6.0) ($4.0) ($2.0) $0.0 $2.0 $4.0 $6.0 Adjusted EBITDA Less Impact of New Stores (In M illi on s) Balanced Prici
Slide 21: EchoPark – Market Pricing Impact
21 EchoPark – Market Pricing Impact 2021 Used Vehicle Market Wholesale Vs. Retail Pricing • Q1 2021 – Normal Market Conditions (See Next Slide) • Wholesale Price Lower Than Market Retail • EchoPark Priced At Discount To Market Retail • Q2 2021 – Abnormal Inverted Wholesale Market Conditions (See Nex
Slide 22: EchoPark vs. Market Pricing Weekly Trend 2021
22 EchoPark Price Near Wholesale Price = Normal GPU EchoPark Price Below Wholesale & Above Market Retail = GPU Pressure To Maintain Volume $18,000 $19,000 $20,000 $21,000 $22,000 $23,000 $24,000 $25,000 $26,000 $27,000 $28,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 2
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 Dealerships86 Brands, Luxury Weighted20+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers14 20 Major Metrop
Slide 25: Franchised Dealerships – Geographic Footprint
25 Franchised Dealerships – Geographic Footprint Platforms Concentrated In Major Metro Markets 86 Stores, 20+ Brands, 14 Collision Repair Centers
Slide 26: Franchised Dealerships – Strategic Levers
26 Franchised Dealerships – Strategic Levers Multiple Growth Drivers Divest Underperforming or Capital-Intensive Stores Grow Parts and Service Maximize F&I Penetration High Used Vehicle Volume Throughput Data-Driven Inventory Management Apply EchoPark Learnings Develop Omni-Channel Platform SG&A Exp
Slide 27: Omni-Channel Strategy
27 Omni-Channel Strategy
Slide 28: Full Omni-Channel Infrastructure
28 Full Omni-Channel 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: Q2 2021 Financial Snapshot
30 Q2 2021 Financial Snapshot
Slide 31: Q2 2021 – Consolidated Continuing Operations
31 Q2 2021 – Consolidated Continuing Operations % Better / (Worse) than (In millions, except per share data) Q2 2021 Q2 2020 Q2 2019 Revenues $3,352.2 58.7% 28.2% Gross profit $510.8 66.2% 34.0% SG&A expenses $320.6 (39.2%) (8.9%) SG&A expenses as % of gross profit 62.8% 1,210 bps 1,440 bps Earnings
Slide 32: Q2 2021 – Franchised Dealerships Segment
32 Q2 2021 – Franchised Dealerships Segment % Better / (Worse) than (In millions, except unit and per unit data) Q2 2021 Q2 2020 Q2 2019 Revenues $2,756.6 53.4% 18.7% Gross profit $474.6 69.3% 34.3% SG&A expenses $275.7 (31.6%) (1.2%) SG&A expenses as % of gross profit 58.1% 1,660 bps 1,900 bps Segm
Slide 33: Q2 2021 – EchoPark Segment
33 Q2 2021 – EchoPark Segment % Better / (Worse) than (In millions, except unit and per unit data) Q2 2021 Q2 2020 Q2 2019 Revenues $595.6 88.9% 104.2% Gross profit $36.2 33.7% 29.6% SG&A expenses $44.9 (115.3%) (102.3%) SG&A expenses as % of gross profit 124.1% (4,700) bps (4,460) bps Segment incom
Slide 34: Strong Balance Sheet And Liquidity
34 Strong Balance Sheet And Liquidity June 30,2021 December 31,2020 (In Millions) Cash and cash equivalents 239.6$ 170.3$ Availability under the 2021 Revolving Credit Facility(1) 224.3 214.7 Availability under the 2019 Mortgage Facility 16.7 11.2 Availability under the 2020 Line Of Credit Facility 5
Slide 35: Capital Expenditure Discipline
35 Capital Expenditure Discipline Strict Capital Allocation Strategy Prioritizes Highest Return On Investment Actual YTD Q2 2021 Capital Expenditures Of $105.2 Million FY 2021E Includes Plans For 25 New EchoPark Locations In 2021 And Real Estate For 2022 Openings $181.2 $87.8 $89.3 $92.4 $80.0 $53.0
Slide 36: Appendix
36 Appendix
Slide 37: Non-GAAP Reconciliation – Segment Income
37 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q2 2021 Q2 2020 Q2 2021 Q2 2020 Q2 2021 Q2 2020 Revenues 2,756.6$ 1,796.6$ 595.6$ 315.3$ 3,352.2$ 2,111.9$ Gross profit 474.6$ 280.3$ 36.2$ 27.1$ 510.8$ 307.4$ SG&
Slide 38: Non-GAAP Reconciliation – Earnings Per Share
38 Non-GAAP Reconciliation – Earnings Per Share Q2 2021 Q2 2020 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations 43,424 113,991$ 2.63$ 43,575 30,996
Slide 39: Non-GAAP Reconciliation – Adjusted EBITDA
39 Non-GAAP Reconciliation – Adjusted EBITDA (In thousands) FY 2017 FY 2018 FY 2019 FY 2020 LTM Q2 2021 Net Income (Loss) 92,983$ 51,650$ 144,137$ (49,349)$ 285,223$ Provision For Income Taxes 13,198 22,645 54,954 12,983 109,487 Income (Loss) Before Taxes 106,181$ 74,295$ 199,091$ (36,366)$ 394,710$
Slide 40: Non-GAAP Reconciliation – Adjusted EBITDA
40 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 113,845 $ 30,791 Provision For Income Taxes 36,97
Slide 41: Non-GAAP Reconciliation – Adjusted EBITDA
41 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 54,222 $ (199,333) Provision For Income Taxes 19,051 (44,200) In
Slide 42: Non-GAAP Reconciliation – Adjusted EBITDA
42 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 59,818 $ 29,010 Provision For Income Taxes 20,620 11,307 Income
Slide 43: Non-GAAP Reconciliation – Adjusted EBITDA
43 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ (199,333) $ 42,221 Provision For Income Taxes (44,200) 18,935 In
Slide 44: Non-GAAP Reconciliation – Adjusted EBITDA
44 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 29,010 $ 15,118 Provision For Income Taxes 11,307 7,262 Income (
Slide 45: Non-GAAP Reconciliation – Adjusted EBITDA
45 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 42,221 $ (2,194) Provision For Income Taxes 18,935 (1,910) Incom
Slide 46: Non-GAAP Reconciliation – Adjusted EBITDA
46 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 15,118 $ 19,440 Provision For Income Taxes 7,262 13,935 Income (
Slide 47: ® ®
® ®
Slide 48: 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