Penske Automotive Group, Inc. · NYSE:PAG

Penske Automotive — Q1 2023 Earnings Presentation

38 slides from Penske Automotive's earnings presentation, Apr 26, 2023

  1. Slide 1: First Quarter 2023 Financial Results

    FIRST QUARTER 2023 FINANCIAL RESULTS

  2. Slide 2: Disclaimer

    DISCLAIMER Statements in this presentation may involve forward-looking statements, including forward- looking statements regarding Penske Automotive Group, Inc.'s financial performance and future plans. Actual results may vary materially because of risks and uncertainties that are difficult to predi

  3. Slide 3: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  4. Slide 4: Company Overview

    COMPANY OVERVIEW COMPANY OVERVIEW A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA As of March 31, 2023 (unless notated) 27,000+ 4 9 Employees worldwide continents countries $27.8B In FY22 revenue 335 20 39 21 automotive CarShop commercial retail commercial veh

  5. Slide 5: Investment Overview

    INVESTMENT OVERVIEW  Diversified business mix provides multiple opportunities for growth  Operate in the highly fragmented automotive and commercial truck retail industries  Retail automotive segment focused on Premium/Luxury brands which generate more than 70% of automotive revenue  The largest

  6. Slide 6: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  7. Slide 7: Q1 2023 Key Takeaways

    Q1 2023 KEY TAKEAWAYS Reported Excl. F/X ($ in millions, except EPS) Revenue $7,339 $7,633 EBT $407 $416 Net Income $298 $306 Earnings Per Share $4.31 $4.42  Record first quarter revenue; increased 5%  Excluding f/x, first quarter revenue increased 9%  SG&A as a percent of gross profit was 67.5%

  8. Slide 8: Q1 2023 Key Highlights

    Q1 2023 KEY HIGHLIGHTS Retail Automotive Retail Commercial Trucks Capital Allocation  Same-store total units retailed of  Retailed 5,172 new & used trucks, +10%;  Increased dividend in January 2023 to 111,745, flat (excluding agency) same-store units +7% $0.61 per share from $0.57, or +7%  Same-

  9. Slide 9: Q1 2023 Performance Highlights

    Q1 2023 PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q1 ‘23 Q1 ‘22 Chg Revenue $7,339 $6,975 +5% Ex cl F/ X $7,633 +9% Retail Auto Same-Store Revenue $6,087 $5,972 +2% Ex cl F/ X $6,346 +6% Inc. from Cont. Ops Before Taxes $407 $498 -18% Ex cl F/ X $416 -16% Income from Cont. Ops

  10. Slide 10: Retail Automotive Brand Mix

    RETAIL AUTOMOTIVE BRAND MIX 72% 19% 1% 8% Premium Volume Non-U.S. U.S. CarShop (YTD as of March 31, 2023) (% of Total Worldwide Automotive Dealership Revenue) 25% 11% 10% 9% 9% 8% 8% 6% 4% 3% 3% 2% 1% 1% Other 10

  11. Slide 11: Long Term Debt and Leverage

    LONG TERM DEBT AND LEVERAGE (USD in Millions) $2,360 4 $2,500 $2,000 3 $1,690 $1,622 $1,701 2.9x $1,500 $1,474 2 $1,000 1.8x 0.9x 1 0.8x 0.8x $500 0 $0 2019 2020 2021 2022 LTM 3/31/23 -$500 -1 Debt Leverage Refer to non-gaap reconciliation schedules on pages 34-36 11

  12. Slide 12: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  13. Slide 13: Retail Automotive Revenue

    RETAIL AUTOMOTIVE REVENUE Diversified Revenue Stream Drives Profitability 6% 2% 3% New 20% 29% 11% Used 43% GROSS REVENUE S&P PROFIT F&I 11% 37% F&WH 38% 13

  14. Slide 14: Q1 2023 Revenue & EBT

    Q1 2023 REVENUE & EBT Segment Segment Global Revenue Revenue Earnings Before Tax $7.3 Billion $7.3 Billion $406.9 Million 14% 34% 12% 58% 86% 63% 20% 2% 8% 3% North America Retail Automotive Retail Commercial Truck United Kingdom Non-Automotive Investments* Other** Other International *Consists of n

  15. Slide 15: Q1 2023 Retail Automotive Key Metrics

    Q1 2023 RETAIL AUTOMOTIVE KEY METRICS Same-Store Q1 ’23 Q1 ’22 Chg VOLUME METRICS New Units* 46,200 45,246 +2% Used Units 65,545 67,029 -2% Total 111,745 112,275 flat Agency Units 5,874 -- -- Total Units 117,619 112,275 +5% GROSS PER UNIT* New $6,383 $6,866 -7% Excl F/ X $6,670 Used $1,821 $2,303 -2

  16. Slide 16: Retail Automotive Same-Store Revenue

    RETAIL AUTOMOTIVE SAME-STORE REVENUE Q1 Q1 Q1 ’23 Q1 ’22 ($ in Millions) ’23 ’22 CHG Excl F/X Excl F/X CHG New Vehicle $2,647 $2,435 +9% $2,736 $2,435 +12% Used Vehicle $2,216 $2,388 -7% $2,342 $2,388 -2% F&I $200 $216 -7% $208 $216 -3% Service & Parts $643 $583 +10% $663 $583 +14% Fleet & Wholesale

  17. Slide 17: PAG Performance Summary – Q1

    PAG PERFORMANCE SUMMARY – Q1 TOTAL REVENUE ($ in Billions) INCOME FROM CONT. OPERATIONS ($ in Millions) $7.0 $7.3 $368 $5.8 $298 $5.0 $183 $52 Q1 '20 Q1 '21 Q1 '22 Q1 '23 Q1 '20 Q1 '21 Q1 '22 Q1 '23 EARNINGS PER SHARE $4.76 $4.31 $2.26 $0.64 Q1 '20 Q1 '21 Q1 '22 Q1 '23 17

  18. Slide 18: CarShop Used Vehicle Centers

    CARSHOP USED VEHICLE CENTERS  Operate used vehicle centers Q1 ’23 Q1 ’22 Chg across U.S./U.K. Units 19,165 19,253 -2%  One price; no haggle approach Revenue ($ in Millions) $489 $516 -5%  In-store or 100% on-line Avg. Trans. Price $20,879 $21,700 -4% Var. Gross/Unit $2,053 $2,155 -5% 18

  19. Slide 19: Premier Truck Group

    PREMIER TRUCK GROUP  Largest dealership group for Daimler Trucks N.A.  Retails new and used Freightliner and Western Star Trucks  39 locations across North America  Service and parts gross profit provides 67% of total gross profit in Q1 2023  6.3% return on sales in Q1  Q1 fixed cost absorptio

  20. Slide 20: Retail Commercial Truck Key Metrics – Q1

    RETAIL COMMERCIAL TRUCK KEY METRICS – Q1 Same-Store Q1 ’23 Q1 ’22 CHG VOLUME METRICS New Units 4,332 3,822 +13% Used Units 642 831 -23% TOTAL 4,974 4,653 +7% GROSS PER UNIT New $7,187 $7,501 -4% Used $8,157 $19,011 -57% F&I $976 $1,364 -28% 20

  21. Slide 21: PTG Performance Summary

    PTG PERFORMANCE SUMMARY TOTAL REVENUE ($ in Millions) INCOME ($ in Millions) $896 $792 $58 $57 $491 $28 $435 $14 Q1 '20 Q1 '21 Q1 '22 Q1 '23 Q1 '20 Q1 '21 Q1 '22 Q1 '23 21

  22. Slide 22: Penske Australia

    PENSKE AUSTRALIA Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles; distributor of diesel/gas engines and power systems across Australia, New Zealand and portions of the Pacific  Western Star, MAN, Dennis Eagle  MTU, Detroit Diesel, Alliso

  23. Slide 23: Penske Transportation Solutions Overview

    PENSKE TRANSPORTATION SOLUTIONS OVERVIEW Penske Truck Leasing Truck Full-Service Contract Used Rental Leasing Maintenance Trucks Penske Logistics Services Dedicated Distribution Freight Professional Contract Center Management Services Carriage Management & Brokerage

  24. Slide 24: Penske Transportation Solutions (PTS) Highlights

    PENSKE TRANSPORTATION SOLUTIONS (PTS) HIGHLIGHTS  Managed fleet of over 419,000 trucks, tractors and trailers OPERATING REVENUE  Fleet goal of 500,000 by 2025 Logistics 23%  Q1 2023 Highlights:  Revenue of $3.3 billion, +6% Consumer 8% 52%  Net income of $280 million, -32 % 17% Commercial Full-

  25. Slide 25: PTS Fleet Growth

    PTS FLEET GROWTH (Units in Thousands) Managed fleet consists of trucks, tractors and trailers under lease, rental and/or maintenance contracts 414 419 360 327 327 297 271 247 231 205 215 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 25

  26. Slide 26: PTS Strategic Opportunities

    PTS STRATEGIC OPPORTUNITIES An expert voice in transportation & logistics The provider of choice for Data & Digital Alternative Autonomy Clean Energy Transportation care and use of vehicles. The provider of choice for management of supply chains. Complexity Resilience Visibility Sustainability

  27. Slide 27: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  28. Slide 28: Spectrum of Retail Options

    SPECTRUM OF RETAIL OPTIONS 100% Online 100% In-Store End-to-End Platform OEM Programs Digital Retailing In-Store CarShop USA OEM powered solutions Enabling customers to In-person transaction at for brand integration shop how they choose the dealership Benefit from OEM Integrated end-to-end marketing

  29. Slide 29: Digitizing Sales and Service

    DIGITIZING SALES AND SERVICE Hybrid Purchase Process Virtual Test Drives and Through Dealer Websites Immersive Chat and Text Vehicle Walkarounds (AI to human-powered) Trade/Sell Valuations Online Credit Application Online Remote Signing Digital Service Approvals AI Service Scheduling Vehicle Status

  30. Slide 30: Growing Self-Service Engagement

    GROWING SELF-SERVICE ENGAGEMENT Q4 2022 vs. Q1 2023 Service Automation 29% Digital assistant to answer and appoint inbound service calls growth in AI booked appts. Q1 ‘23 vs. Q1 ‘22 Online Service Appointments Booked 14% Growth Q1 ‘23 vs. Q1 ‘22 Online Service Payments 8% Growth

  31. Slide 31: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  32. Slide 32: Operating Sustainably

    OPERATING SUSTAINABLY We regularly examine our operations, seeking opportunities to reduce our carbon footprint and push ourselves to operate more efficiently and use resources responsibly. Modern building standards Leveraging partnerships (Shell) Embracing energy Renewable energy sources efficiency

  33. Slide 33: Agenda

    Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Sustainability Non-GAAP

  34. Slide 34: EBITDA Reconciliation

    EBITDA RECONCILIATION The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the three months ended March 31, 2023 and 2022 Three Months Change ($ in Millions) Ended March 31, 2023 vs 2022 2023 2022 $ % Net Income $299.6 $

  35. Slide 35: EBITDA & Leverage Ratio Reconciliation

    EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA and the leverage ratio for the trailing twelve months ended March 31, 2023 ($ in Millions) Nine Three Trailing Twelve Months Ended Months Ended Months Ended December 31, 2022 March 31, 2023 March 31, 2023 Net Income $1,016.

  36. Slide 36: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation

    EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2022, 2021, 2020 and 2019 ($ in Millions) 12M ‘22 12M ’21 12M ’20 12M ‘19 Net Income $1,386.2 $1,192.7 $545.3 $435.1 Add: Depreciation $127.3 $121.5 $115.5 $10

  37. Slide 37: Agency

    AGENCY Beginning in 2023, we transitioned certain brands in the U.K. to an agency model under which these dealerships receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model do not count as new retai

  38. Slide 38: Penske

    PENSKE Autornotive

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