Asbury Automotive Group Inc · NYSE:ABG
Asbury Automotive — Q4 2021 Earnings Presentation
34 slides from Asbury Automotive's earnings presentation, Feb 15, 2022
Slide 1: Asbury Automotive Group
™ ™ 1 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved. © Asbury Automotive Group 2022. All rights reserved.
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. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, market condition
Slide 3: Mission & Vision
™ Mission & Vision Our North Star is the “Guest Experience” 3 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 4: Company overview and financial highlights
™ NYSE: ABG FORTUNE 500 >$15B 6th LARGEST (5) AUTOMOTIVE RETAILER TOTAL REVENUE (1) AUTOMOTIVE RETAILER Closed acquisitions totaling $6.6B in annualized revenue in 2021 FINANCIAL HIGHLIGHTS (4) REVENUE ADJ EBITDA ADJ EPS ($MM) ($MM) 2021 $9,838 $828 $27.29 2020 $7,132 $427 $12.90 2019 $7,210 $333 $9
Slide 5: Our Strategy
™ Our Strategy Operational Capital Excellence Deployment Shareholder Value Two fundamental principles to drive shareholder value 5 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 6: Multiple Potential Drivers of Growth: Growth Plan
™ Multiple Potential Drivers of Growth: Growth Plan(1) Goals 1. Grow revenue at an average of 20% per year $20B 2. Expand operating margins $5B 3. Grow EPS in excess of top line (20%+ per year) Acquisitions $5B Acquired $6.6B of Clicklane annualized revenue Exceeded acquisition growth target $2B of
Slide 7: Acquisition History
™ Acquisition History (Annualized Revenue $ Acquired) $6,600M We opportunistically seek acquisitions in the right markets, with the right brands, with the right people, that are accretive to $1,825M our business $425M $220M $150M 2017 2018 2019 2020 2021 Thoughtfully growing the company through stra
Slide 8: 2021 Acquisition Overview
2021 Acquisition Overview ™ Key Brands 65 new vehicle dealerships; 7 used vehicle dealerships; 11 collision centers 20 automotive brands in highly desirable growth markets Scalable F&I product provider creating complementary incremental revenue stream $6.6B in annualized revenue Note: Dealership rev
Slide 9: TCA Offerings
™ TCA Offerings Vehicle Sold (Dealership) Service Drives F&I TCA F&I Products Sold Product Sold (Dealership (Dealership and TCA) and TCA) TCA Life Cycle Repair Work Claims Paid (Dealership) (TCA) Key Offerings Vehicle service ✓ Extensive list of vehicle parts and systems Key & remote ✓ 24 hour emerg
Slide 10: Recent Acquisitions are Highly Strategic Assets
Recent Acquisitions are Highly Strategic Assets and ™ Transform Asbury into a Coast-to-Coast Automotive Retailer Acquired dealerships represent a strong portfolio of assets with a long history of operational excellence 1 and valuable brands 2 Meaningfully increase Asbury’s scale and creates one of t
Slide 11: Asbury Has Developed a Robust Omni-Channel Platform
™ Asbury Has Developed a Robust Omni-Channel Platform Parts & Service Sales & Marketing ™ ❑ Online service ❑ Industry leading data appointment aggregation, scheduling, parts sales deployment and and customer payments messaging services ❑ Service status tracker ❑ Redesigned telephony ❑ Service MPI ph
Slide 12: Clicklane: Online Transactional Tool
is a True Online Transactional Tool Built Around ™ ™ Transparency to Deliver the Ultimate Guest Experience Key Clicklane Statistics(1) ❑ Simplified flow customized to the individual Customized Buying consumer’s preferred buying journey ~16K(2) Q2-Q4 2021 Actual Volume and Sell-Your-Car ❑ User friend
Slide 13: Online Service Appointments
™ Online Service Appointments Increasing the use of online service appointments creates higher customer retention and increased revenue per repair order Digital is driving business growth and enhancing the customer experience leading to higher conversion rates, higher margins and higher returns to o
Slide 14: Advertising Spend
™ Advertising Spend Advertising PVR Internet Leads Digital represents over 80% of our advertising spend enabling greater flexibility and improving efficiency 14 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 15: The Four Key Components of Our Business
™ The Four Key Components of Our Business (FY 2021) Diversified business mix provides multiple profit streams that are independent of SAAR 15 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 16: F&I Gross Profit per Unit Sold
™ F&I Gross Profit per Unit Sold (Same store) F&I GP PVR 5.7% 5-year CAGR Solid training and execution drive F&I performance 16 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 17: Parts & Service
™ Parts & Service ($ in Millions) Gross Margin % Total P&S Revenue $ 8.7% 5-year CAGR(1) Parts and Service is our highest margin business and has consistently generated steady growth (1) Data represents total company 17 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 18: Operating Income and Margin Trend
™ Operating Income and Margin Trend Adj. Operating Margin Adj. Operating Income ($M) We consistently deliver best in class operating efficiency Note: See Appendix for Non-GAAP reconciliations 18 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 19: Cash Flow Summary
™ Cash Flow Summary ($ in Millions, except per share amounts) Adj. Operating Cash Flow per Share Business generates significant free cash flow Note: See Appendix for Non-GAAP reconciliations 19 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 20: Leverage Varies Based on Business Conditions and Environment
™ Leverage Varies Based on Business Conditions and Environment 2.5x Normal Target Range 3.0x Net Debt / EBITDA Factors Influencing Leverage Top Economic Cycle Bottom High Macro Economic Risks Low Anticipated Investment Opportunities Executed High Equity Valuation Multiple Low Unfavorable Debt Struct
Slide 21: Environmental, Social, and Governance (ESG) Impact
™ Environmental, Social, and Governance (“ESG”) Impact Minimizing Impact on the Environment • Recycling – cardboard, glass, plastic, motor oil, tires • Reclaiming – water in car washes • Reducing – water usage, energy through motion sensors and LED lighting Giving Back to our Friends and Neighbors •
Slide 22: ESG at a Glance
™ ESG at a Glance 40 hours PTO Provided food and school Annual online Employee hotline per employee certification enables provided to supplies to students at low- to anonymously report income schools in multiple markets employees to be well-versed concerns/violations of code volunteer with our of co
Slide 23: Appendix
™ Appendix 23 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 24: Q4 2021 Financial Update
™ Q4 2021 Financial Update Q4 2021 Highlights Q4 '21 Q4 '20 Change Volume Metrics (SS) ❑ Total revenue of $2.7 billion, up 19% US Auto Sales (M) 3.30 4.20 (21.3%) New Units 22,557 28,441 (20.7%) from the prior year period; total Used Retail Units 24,553 21,260 15.5% revenue on a same-store basis was
Slide 25: Attractive Brand Mix
™ Attractive Brand Mix (Based on New Vehicle Revenue – FY 2021) Luxury - 44% Import - 39% Domestic - 17% 25 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.
Slide 26: Capital Allocation History
™ Capital Allocation History Acquisitions $150M Revenue Acquired $220M Revenue Acquired $425M Revenue Acquired $1.8B Revenue Acquired $6.6B Revenue Acquired ▪ Hare Chevrolet/Isuzu ▪ Terry Lee Honda – ▪ Estes Group and ▪ Elway CDJR – ▪ LHM & TCA – 7 States - Indiana Indiana Butler Toyota – Colorado ▪
Slide 27: Debt Maturity Schedule
™ Debt Maturity Schedule ($ in Millions) Our near-term obligations remain minimal with no significant maturities until 2025 NYSE | ABG Note: As of 12/31/2021; Excludes $8.4M of capital leases 27 © Asbury Automotive Group 2022. All rights reserved.
Slide 28: Non-GAAP Financial Disclosure and Reconciliation
™ Non-GAAP Financial Disclosure and Reconciliation In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among
Slide 29: Non-GAAP Reconciliation – Adjusted Income from Operations and Adjusted Operating Margin
Non-GAAP Reconciliation – Adjusted Income from Operations and ™ Adjusted Operating Margin For the Three Months ($ In millions) For the Twelve Months Ended December 31, Ended December 31, 2021 2020 2019 2018 2017 2021 2020 Adjusted income from operations: Income from operations $ 791.8 $ 370.8 $ 325.
Slide 30: Non-GAAP Reconciliation – Adjusted EBITDA
™ Non-GAAP Reconciliation – Adjusted EBITDA For the Three Months ($ In millions) For the Twelve Months Ended December 31, Ended December 31, 2021 2020 2019 2018 2017 2021 2020 Adjusted EBITDA: Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 532.
Slide 31: Non-GAAP Reconciliation – Adjusted Net Income and Adjusted EPS
™ Non-GAAP Reconciliation – Adjusted Net Income and Adjusted EPS For the Three Months (In millions, except per share data) For the Twelve Months Ended December 31, Ended December 31, 2021 2020 2019 2018 2017 2021 2020 Adjusted net income: Net income $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 $ 140.5 $
Slide 32: Non-GAAP Reconciliation – Adjusted SG&A Expense
™ Non-GAAP Reconciliation – Adjusted SG&A Expense For the Twelve Months For the Three Months (In millions) Ended December 31, Ended December 31, 2021 2020 2021 2020 Adjusted SG&A expense: SG&A expense $ 1,073.9 $ 781.9 $ 295.7 $ 228.5 Professional fees associated with acquisitions (4.9) (1.3) (1.4)
Slide 33: Non-GAAP Reconciliation – Pro Forma Adjusted Net Leverage Ratio
™ Non-GAAP Reconciliation – Pro Forma Adjusted Net Leverage Ratio For the Twelve Months ($ In millions) Ended December 31, 2021 2020 Pro forma adjusted net leverage ratio: Long-term debt (including current portion) $ 3,582.6 $ 1,201.8 Debt included in Liabilities held for sale - 8.9 Cash and floor p
Slide 34: Non-GAAP Reconciliation – Adjusted Cash Flow from Operations
™ Non-GAAP Reconciliation – Adjusted Cash Flow from Operations (In millions, except per share data) For the Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Adjusted cash flow from operations: Cash flow from operations $ 1,163.3 $ 652.5 $ 349.8 $ 10.1 $ 266.3 Change in Floorplan Notes Payab
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