Slide 1: Investor Presentation Second Quarter 2023
Investor Presentation Second Quarter 2023 7/20/2023 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be dee
Slide 3: AutoNation Investment Highlights
AutoNation Investment Highlights ▪ Substantial, predictable cash flow generation coupled ▪ Building concentrated scale and scope in markets to with disciplined capital allocation drives long-term maximize performance value ▪ Developing end-to-end transportation solutions to ▪ Trusted Industry leadin
Slide 4: Overview
Overview 11 Million 10+ Million 24,000 353 253 16 53 4 Customers Households Associates Franchises Franchised AN USA Collision Vehicle Dealerships Stores Centers Auctions 16 1 3 Total Revenue $27 Billion 13 7 17 44% 36% 15% 5% 8 21 2 45 1 Total Gross Profit $5.3 Billion 1 9 19 1 10 26% 11% 36% 27% 3
Slide 5: AutoNation: Initiatives
AutoNation: Initiatives To provide a comprehensive range of transportation solutions to our 11 Million Customers & Households Extending value creation of core business by increasing the depth and breadth of product and service offerings: ▪ Convenient, transparent and trusted customer experience to d
Slide 6: Financial Review
Financial Review 6
Slide 7: Q2 2023 Highlights
Q2 2023 Highlights Our diversified business model and disciplined capital deployment delivered strong results Q2 ’23 EPS of $6.02, Q2 ’23 Adj. EPS of $6.29, Prior Year EPS of $6.48 Robust performance and benefits of capital deployment After-Sales Gross Profit of $543 Million up 13% From Prior Year G
Slide 8: Q2 2023 Financial Summary
Q2 2023 Financial Summary ($ in millions, except per share data) Q2 2023 Q2 2022 YoY Total revenue $6,890 $6,869 0.3% Gross profit $1,335 $1,362 -2% Adj. SG&A Expense* $826 $755 9% Adj. SG&A / Gross Profit 61.9% 55.4% 650bps Adj. Operating income $456 $558 -18% Adj. Net income $285 $376 -24% Adj. EP
Slide 9: Q2 2023 Financial Summary
Q2 2023 Financial Summary ($ in millions, except per share data) Q2 2023 Q1 2023 QoQ Total revenue $6,890 $6,399 8% Gross profit $1,335 $1,286 4% Adj. SG&A Expense* $826 $783 5% Adj. SG&A / Gross Profit 61.9% 60.8% 110bps Adj. Operating income $456 $443 3% Adj. Net income $285 $289 -1% Adj. EPS $6.2
Slide 10: Robust Consistent Cash Flow Generation
Robust Consistent Cash Flow Generation CASH FLOW FROM OPERATIONS ($MM) $1,628 $1,668 $1,208 $769 $507 ▪ Substantial consistent cash flow generation supports disciplined capital allocation and 2019 2020 2021 2022 1H 2023 drives long-term shareholder value ∆ in Non-Trade ($143) ($233) ($264) +$179 +$1
Slide 11: Shares Outstanding Significantly Reduced
Shares Outstanding Significantly Reduced SHARES OUTSTANDING 89.3 83.5 62.6 ▪ Investments over the past 3+ years in 47.6 44.0 Share Repurchases have halved shares outstanding ▪ During Second Quarter 2023, 2019 2020 2021 2022 1H 2023 investment of $207 million to YoY ∆ -8% -6% -25% -24% repurchase 1.6
Slide 12: After-Sales: Consistently Growing High-Margin Business
After-Sales: Consistently Growing High-Margin Business REVENUE ($MM) $1,145 ▪ Q2 2023 Revenue growth of >10% $1,090 ▪ Q2 2023 Gross Profit up 13% from a year ago $1,036 $1,032 $1,028 ▪ Compared to FY 2019: ▪ TTM Revenue up ~$720M ▪ TTM Gross Profit up ~$390M Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 GROSS
Slide 13: New Vehicles: Continued Robust Performance
New Vehicles: Continued Robust Performance NEW RETAIL UNITS 74,383 62,444 ▪ Industry Unit sales improving but remain 57,890 60,074 55,565 55,065 below historical levels ▪ Overall Inventory increasing, varies by brand and model ▪ Incentives and leasing penetration remain low Q4 '19 Q2 '22 Q3 '22 Q4 '
Slide 14: Used Vehicles: Strong Gross Profit
Used Vehicles: Strong Gross Profit USED RETAIL UNITS 77,080 75,355 67,608 67,539 68,812 59,022 ▪ Enhancing Used vehicle economics through effective self sourcing, reconditioning and pricing ▪ Q2 units increased sequentially Q4 '19 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 ▪ Q2 PVRs remain strong and were D
Slide 15: Continued Industry Leading Customer Financial Services
Continued Industry Leading Customer Financial Services REVENUE ($MM) PVR ($) $2,713 $2,815 $368 $370 $2,443 $361 $2,158 $1,935 $1,789 $345 $332 Q2 '22 Q3 '22 Q4 '22 Q1 '23 Q2 '23 FY '18 FY '19 FY '20 FY '21 FY '22 Q2 2023 Q2 2023 Results Drivers and Trends ▪ Higher PVR offset lower unit volume ▪ Pro
Slide 16: Sustained Profitability: SG&A/Gross & Operating Inc Margin
Sustained Profitability: SG&A/Gross & Operating Inc Margin ADJ SG&A / GROSS PROFIT (%) 72.3% 67.2% 61.9% ▪ SG&A/Gross Profit remains well below 58.0% 57.3% historical levels, reflecting continued expense discipline, investments in technology and new business FY 2019 FY 2020 FY 2021 FY 2022 Q2 2023 ▪
Slide 17: Appendix
Appendix This presentation contains certain non-GAAP financial measures for which we have set forth below reconciliations to the most comparable GAAP measures. The Company believes that these measures improve the transparency of the Company’s disclosure, provide a meaningful presentation of the Comp
Slide 18: Select Historical Data
Select Historical Data Global Financial Crisis to 2022 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Avg. SAAR (mm) 13.1 10.3 11.5 12.6 14.3 15.4 16.4 17.4 17.5 17.1 17.2 17.0 14.5 14.9 13.7 14.9 New Retail SAAR (mm) 10.6 8.6 9.2 10.3 11.7 12.8 13.6 14.2 14.2 14.1 13.9 1
Slide 19: Non-GAAP Reconciliations
Non-GAAP Reconciliations Current Period Reconciliations Comparable Basis Reconciliations(1) Three Months Ended June 30, Income from Continuing Operations Before Operating Income Income Taxes Income Tax Provision(2) Effective Tax Rate Net Income Diluted Earnings Per Share(3) 2023 2022 2023 2022 2023
Slide 20: Non-GAAP Reconciliations
Non-GAAP Reconciliations Historical Adjusted SG&A Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended ($ in millions) December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 SG&A as a Percentage SG&A as a Percentage SG&A as a Percentage SG&A as a Percentag
Slide 21: Non-GAAP Reconciliations
Non-GAAP Reconciliations Historical Adjusted Operating Income Twelve Months Ended Twelve Months Ended Twelve Months Ended Twelve Months Ended ($ in millions) December 31, 2022 December 31, 2021 December 31, 2020 December 31, 2019 Percentage of Revenue Percentage of Revenue Percentage of Revenue Perc