Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (July 2022)
42 slides from Sonic Automotive's investor presentation, Jul 28, 2022
Slide 1: Sonic Automotive – Investor Presentation July 2022
® Sonic Automotive – Investor Presentation July 2022 Updated July 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 161 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 Dealerships Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised Dealerships And EchoPark Disciplined Capital Allocation To Accelerate EchoPark
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 25% CA 21% CO 8% ID 7% TN 6% FL 5% AL 5% IN 5% NC 4% GA 4% VA 2% MD 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 Six Months Ended June 30, 2022 5% 29% 11% 33% 43% 8% 41% 30% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insuran
Slide 8: EchoPark Automotive – A Unique Growth Story
8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Unique, High Return Business Model Focus On High Quality Pre-Owned Vehicles, In-Store or Online Expect To Reach 90% Of U.S. Population By 2025 Priced Up To $3,000 Below Market With Simplified, Easy Purchase Exper
Slide 9: Franchised Dealerships and EchoPark: Complementary Relationship
9 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diversified Revenue Streams • Relatively Low Fixed Costs And Multiple Strategic Levers • Further Growth Opportunities: Parts And Se
Slide 10: Strategic Direction
10 Strategic Direction • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distri
Slide 11: Strong Balance Sheet And Liquidity
11 Strong Balance Sheet And Liquidity June 30, 2022 December 31, 2021 (In Millions) Cash and cash equivalents 327.1$ 299.4$ Availability under the 2021 Revolving Credit Facility 274.9 281.4 Availability under the 2019 Mortgage Facility 27.7 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 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 14: EchoPark – Developing Nationwide Distribution Network
14 EchoPark – Developing Nationwide Distribution Network Approaching 50% 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 Cen
Slide 15: EchoPark – Addressable Market Opportunity
15 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit 1-4-Year-Old 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 Most Mature Market Priced Up to $3,00
Slide 16: EchoPark – Delivery Center Model
16 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 17: EchoPark – Industry Headwinds & Action Plan
17 EchoPark – Industry Headwinds & Action Plan Industry Headwinds • Supply Chain Disruption Continues To Suppress 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
Slide 18: EchoPark – Initial Results In Houston Market
18 EchoPark – Initial Results In Houston Market $(1,500) $(1,300) $(1,100) $(900) $(700) $(500) $(300) ($ In T ho us an ds ) Used Retail Unit Volume Pre-Tax Profit (Loss) Beginning In Mid-April, Houston Market Piloted Expansion Of Inventory To Include 5+ Year Old Vehicles, Benefiting Non-Auction Sou
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 21,255 15,649 14,995 16,608 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Qua
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) ($28.5) ($14.6) ($29.0) ($27.9) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(17.9)$(18.2) $(30) $(25) $(20) $(15) $(10) $(5) $- $5 $10 Adjusted EBITDA Less I
Slide 21: Franchised Dealerships
21 Franchised Dealerships
Slide 22: Franchised Dealerships
22 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 23: Franchised Dealerships – Geographic Footprint
23 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers
Slide 24: Franchised Dealerships – Strategic Growth Levers
24 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 25: Omnichannel Strategy
25 Omnichannel Strategy
Slide 26: Full Omnichannel Infrastructure
26 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 27: Buy & Sell Your Way
27 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 28: New EchoPark.com Results to Date
28 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 F&I of $2,250 Per Unit Exceeding Projections For End-To-End Online F&I Product Sales Nearly 70% Of Vehicles Sold Out Of Market, Driving Incremental Reach Tec
Slide 29: Appendix
29 Appendix
Slide 30: Non-GAAP Reconciliation – Segment Income – QTD
30 Non-GAAP Reconciliation – Segment Income – QTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q2 2022 Q2 2021 Q2 2022 Q2 2021 Q2 2022 Q2 2021 Revenues 2,987.2$ 2,756.6$ 665.6$ 595.6$ 3,652.8$ 3,352.2$ Gross profit 539.3$ 474.6$ 49.5$ 36.2$ 588.8$ 510.
Slide 31: Non-GAAP Reconciliation – Segment Income – YTD
31 Non-GAAP Reconciliation – Segment Income – YTD Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 YTD Q2 2022 YTD Q2 2021 Revenues 5,948.5$ 5,036.3$ 1,290.9$ 1,102.7$ 7,239.4$ 6,139.0$ Gross profit 1,066.3$
Slide 32: Non-GAAP Reconciliation – Segment Income – Prior FY
32 Non-GAAP Reconciliation – Segment Income – Prior FY 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$ 1
Slide 33: Non-GAAP Reconciliation – Adjusted EBITDA
33 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 For The FY Then Ended. For The LTM Q2 2022 Period, Balance Sheet Amounts Are As Of June 30, 2022. (In millions) FY 2018 FY 2019 FY 2020 FY 2021 LTM Q2 2022 Net Income (Loss) 51.7$ 144.1$ (51.4)$ 348.9$ 37
Slide 34: Non-GAAP Reconciliation – Adjusted EBITDA By Segment
34 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 35: Adjusted EBITDA By Segment – Q4 2021 / Q4 2020
35 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 36: Adjusted EBITDA By Segment – Q2 2021 / Q2 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) $ 113.8 $ 30.8 Provision For Income Taxes 37.0 6.3 Income (Loss) Before Taxes $ 165.4 $ (14.4)
Slide 37: Adjusted EBITDA By Segment – Q4 2020 / Q4 2019
37 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 38: Adjusted EBITDA By Segment – Q2 2020 / Q2 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) $ 30.8 $ 26.6 Provision For Income Taxes 6.3 10.0 Income (Loss) Before Taxes $ 34.8 $ 2.6 $ (0.
Slide 39: Adjusted EBITDA By Segment – Q4 2019 / Q4 2018
39 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 40: Adjusted EBITDA By Segment – Q1 2019 / Q1 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) $ 42.2 $ (2.2) Provision For Income Taxes 19.0 (1.9) Income (Loss) Before Taxes $ 61.2 $ 0.2 $
Slide 41: Adjusted EBITDA By Segment – Q4 2018 / Q4 2017
41 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 42: 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