Asbury Automotive Group Inc · NYSE:ABG
Asbury Automotive — Q3 2021 Earnings Presentation
26 slides from Asbury Automotive's earnings presentation, Oct 26, 2021
Slide 1: Investor Presentation Q3 2021
Investor Presentation Q3 | 2021 1 NYSE | ABG © Asbury Automotive Group 2021. 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 conditions
Slide 3: Mission & Vision
Mission & Vision North Star is the “Guest Experience” 3 NYSE | ABG © Asbury Automotive Group 2021. All rights reserved.
Slide 4: Q3 Highlights
NYSE: ABG FORTUNE 500 ~$8B 6th LARGEST (5) AUTOMOTIVE RETAILER TOTAL REVENUE (1) AUTOMOTIVE RETAILER Announced acquisitions under contract totaling $6.6B in annualized revenue; All expected to close in Q4 Q3 HIGHLIGHTS 91 (3) New PVR Adj. SG&A % of GP(4) Locations $5,088/+106% 55.3%/-580 bps 6% 3% 5
Slide 5: Attractive Brand Mix
Attractive Brand Mix (Based on New Vehicle Revenue – September ‘21 YTD) Luxury - 45% Import - 40% Domestic - 15% Very attractive, diversified portfolio of brands 5 NYSE | ABG © Asbury Automotive Group 2021. All rights reserved.
Slide 6: Our Strategy
Our Strategy ❑ Attract and retain the best talent ❑ Implement best practices and improve productivity Operational Excellence ❑ Provide an exceptional guest experience Strategy ❑ Leverage our scale and cost structure to improve our operating efficiencies ❑ Enhance our omni-channel and online selling
Slide 7: Performance History
Performance History EPS: $12.90 (1) New Margin: 5.8% Used Margin: 7.5% EPS: $5.57 (1) F&I PVR: $1,736 New Margin: 5.6% SG&A: 63.8% (1) (1) Used Margin: 7.9% Operating Margin: 5.7% F&I PVR: $1,397 EPS: $2.09 (1) (1) SG&A: 68.8% EPS: $1.36 Operating Margin: 4.6% New Margin: 7.5% New Margin: 8.2% Used
Slide 8: Multiple Drivers of Growth: 2021-2025 Targets
Multiple Drivers of Growth: 5 Year Plan(1) $5B $20B ~20% CAGR Acquisitions $5B Expected to acquire $6.6B(3) Clicklane of annualized revenue Expected to exceed acquisition $2B growth target of $5B through high quality strategic acquisitions Same Store $8B ❑ Invest in training ❑ Drive traffic and conv
Slide 9: Digital Platforms Enhancing Productivity
Digital Platforms Enhancing Productivity Sales & Parts & Marketing Service ❑ Industry leading data aggregation, deployment, and ❑ Online service appointment scheduling messaging services ❑ Online parts sales ❑ Redesigned telephony services with systematic APIs ❑ Service status tracker designed to en
Slide 10: Advertising Spend and Online Service Appointments
Advertising Spend and Online Service Appointments Appointments (000s) Online Service Advertising PVR Internet Leads (000s) Digital is driving business growth and enhancing the customer experience; quarterly online service appointment volume has grown ~475% since Q1‘16 10 NYSE | ABG © Asbury Automoti
Slide 11: The Four Key Components of Our Business
The Four Key Components of Our Business (Q3 2021) Used, Parts & Service and F&I account for 53% of revenue and 74% of gross profit 11 NYSE | ABG © Asbury Automotive Group 2021. All rights reserved.
Slide 12: YTD Front-End Yield and PVR Trends
YTD Front-End Yield and PVR Trends (Same Store) (1) (2) Since 2005, improvement in F&I PVR has more than offset pressure on new and used margins; however, since Q1 2020, margins have improved due to inventory shortages Note: Data shown represents September YTD PVR in each year specified. 12 (1) Fron
Slide 13: F&I Gross Profit per Unit Sold
F&I Gross Profit per Unit Sold (Same store) F&I GP PVR 5.2% Average Annual Growth Solid training and execution continue to drive F&I performance Note: Excludes discontinued operations 13 NYSE | ABG © Asbury Automotive Group 2021. All rights reserved.
Slide 14: Parts & Services Gross Profit
Parts & Services Gross Profit ❑ Parts & Service gross profit has steadily improved (1,2) Total Fixed GP $ 4.4% Average Annual Growth (1) More units in operation, online scheduling capabilities and the complexity of modern vehicles should drive mid-single digit parts and service growth through econom
Slide 15: 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 Structur
Slide 16: 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 • T
Slide 17: ESG at a Glance
ESG at a Glance 40 Raised $ to provide food and Annual online Employee hotline HOURS PTO supplies to students at low-income certification enables to anonymously report provided to schools during Winter break in concerns/violations of code employees to be well-versed volunteer with our 2020 of conduc
Slide 18: Summary
Summary ❑ Attractive brand mix and geographic footprint ❑ Operational excellence: ▪ Best in class operating margins and strong growth track record ▪ Omni-channel and Online selling initiatives are driving sales, efficiencies and the guest experience ❑ Diversified business lines: ▪ SAAR is not the pr
Slide 19: Appendix
Appendix 19 NYSE | ABG © Asbury Automotive Group 2021. All rights reserved.
Slide 20: Q3 2021 Summary
Q3 2021 Summary ❑ Total Company: ▪ Revenue increased 30%; Gross profit increased 43%; Gross margin increased 180 bps to 20% ▪ New vehicle unit volume increased 1%; new vehicle revenue increased 18%; gross profit increased 108% ▪ Used vehicle retail unit volume increased 36%; used vehicle retail reve
Slide 21: Q3 2021 Earnings Highlights & Key Metrics
Q3 2021 Earnings Highlights & Key Metrics Q3 '21 Q3 '20 Change Volume Metrics (SS) US Auto Sales (M) 3.40 3.92 (13.4%) New Units 22,547 24,233 (7.0%) Used Retail Units 25,442 20,050 26.9% Used to New Ratio 112.8% 82.7% 3010 bps Fixed Gross Profit ($M) $155.9 $142.2 9.6% Margin Metrics (SS) New Margi
Slide 22: Debt Maturity Schedule
Debt Maturity Schedule ($ in Millions) Our near-term obligations remain minimal with no significant maturities until 2025 22 NYSE | ABG Note: As of 9/30/21; Excludes $24.9M of capital leases © Asbury Automotive Group 2021. All rights reserved.
Slide 23: 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 ot
Slide 24: Non-GAAP Reconciliation
Non-GAAP Reconciliation (In millions, except EPS) Adjusted Diluted EPS Q3'21 Q3'20 2020 2015 2007 2002 Net Income $ 147.0 $ 96.2 $ 254.4 $ 169.4 $ 54.3 $ 39.9 Non-core items - (income)/expense: Legal settlements - - (2.1) - 2.5 - Gain on sale of real estate - - (0.3) - - - Real estate related charge
Slide 25: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in Millions) Adjusted Income from Operations Q3'21 Q3'20 2020 2018 2007 Total Revenue $ 2,406.0 $ 1,845.4 $ 7,131.8 $ 6,874.4 $ 5,713.0 Income from operations $ 201.0 $ 119.1 $ 370.8 $ 310.9 $ 181.4 Non-core items: Legal settlements - - (2.1) (0.7) 2.5 Gain on sale of real
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in Millions) Adjusted SG&A Q3'21 Q3'20 2020 2007 Gross Profit $ 480.0 $ 335.9 $ 1,223.4 $ 889.4 SG&A Expense 268.7 206.5 781.9 685.6 Professional fees associated with acquisitions (3.5) - - (2.5) Legal settlements - - - (2.5) Park Place related acquisitions costs - (1.3) (
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