Asbury Automotive Group Inc · NYSE:ABG
Asbury Automotive — Q4 2022 Earnings Presentation
35 slides from Asbury Automotive's earnings presentation, Feb 2, 2023
Slide 1: 4th Quarter & Full Year 2022 Investor Relations Presentation
4TH QUARTER & FULL YEAR 2022 INVESTOR RELATIONS PRESENTATION ABG | Asbury Automotive
Slide 2: 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, objectives, projections regarding Asbury's fi
Slide 3: Our Agenda
Our Agenda February 2, 2023 01 Company Highlights 02 Fourth Quarter and Full Year 2022 Review 03 Growth Strategy 04 Appendix 3
Slide 4: Company Highlights
COMPANY HIGHLIGHTS ABG | Asbury Automotive 4
Slide 5: Company Highlights
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Company Highlights $37.66 Since 2017, Asbury has(1) $15.43B $27.29 139% increase in revenue (19% CAGR) $12.90 486% increase in Adj EPS (42% CAGR) $9.46 $9.84B $8.41 74% increase in new car dealerships $6.43 $6.87B $7.21B $7.13B $6.46B 155 Adj Op. Cash Flow 139 Ad
Slide 6: Company Highlights
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Company Highlights TOTAL CARE AUTO 1 Integrated F&I Product Provider WA 4 $15 BILLION Total Revenue(1) ID 2 21 21 9 300,000 + UT CO 6 IN 4 New and Used Vehicles Retailed CA MO VA 12 6 5 1.7X AZ NM 17 SC Adjusted Net Leverage(2,3) 14 GA TX $1.5B 24 Available Liqui
Slide 7: Attractive Brand Mix
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Attractive Brand Mix A diversified portfolio with the right brands in the right markets (Based on New Vehicle Revenue – FY22) Luxury Imports Lexus 9% Toyota 17% Mercedes-Benz 8% Honda 9% Luxury Domestic 29% BMW 4% Hyundai 5% 31% Acura 2% Nissan 4% Porsche 2% Suba
Slide 8: The Four Key Components
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX The Four Key Components Diversified business mix provides multiple profit streams (FY22) 5% F&I, includes TCA 13% 24% Parts & Service Independent Used of SAAR 34% New 37% 11% 48% 27% Revenue Gross Profit May not add to 100% due to rounding 8 NYSE: ABG
Slide 9: Enhancing Our Impact
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Enhancing Our Impact We are committed to our team members and the communities we live in Talent and Career Development Programs • Piloted our guest centric training within our Atlanta market and will expand training to other markets in Q1 2023 • Launched the care
Slide 10: Fourth Quarter & Full Year 2022
FOURTH QUARTER & FULL YEAR 2022 ABG | Asbury Automotive 10
Slide 11: Summary
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Summary 2022 Year-Over-Year Growth Strategic Highlights 4Q Revenue FY Revenue Delivered record adjusted EPS and EBITDA for Total Total the full year Same Store Same Store Company Company Sold over 27,500 vehicles via Clicklane, our Total 40% 1% 57% (1%) fully tra
Slide 12: Operating Income & Margin Trend
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Operating Income & Margin Trend We consistently deliver best-in-class operating efficiency 8.1% 8.3% Adj. Operating Margin $1,274 Increased year over year: 5.7% • adjusted operating income by $481 million or 61%, and 4.6% • adjusted operating margin by 19 bps $79
Slide 13: Cash Flow Summary
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Cash Flow Summary As a larger company with more robust operating cash flow, we have increased capacity for capital deployment $44.15 Adj. Operating Cash Flow per Share $31.52 $987 Increased year over year: $22.93 • adjusted operating cash $893 flow by $355 millio
Slide 14: Leverage and Liquidity
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Leverage and Liquidity Deleveraged quickly following large acquisitions, providing opportunity for capital deployment – share repurchases and acquisitions Pro Forma Net Leverage Ratio Total Liquidity ($M) 2.7x $1,540 2.2x $1,173 2.1x $1,009 1.9x $805 1.7x $553 4Q
Slide 15: Leverage Varies Based on Business Conditions & Environment
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Leverage Varies Based on Business Conditions & Environment Equilibrium leverage target range balances financial flexibility with an efficient capital structure 2.5x Normal Target Range 3.0x NET DEBT/EBITDA Factors Influencing Leverage Top ECONOMIC CYCLE Bottom Hi
Slide 16: Capital Allocation History
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Capital Allocation History We have a track record of prudent capital allocation ‘14-’17 2018 2019 2020 2021 2022 Acquisitions $615M Revenue Acquired $220M Revenue Acquired $425M Revenue Acquired $1.8B Revenue Acquired $5.8B(2) Revenue Acquired N/A ▪ Dealerships i
Slide 17: Growth Strategy Update
GROWTH STRATEGY UPDATE ABG | Asbury Automotive 17
Slide 18: Our Strategy
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Our Strategy Two fundamental principles to drive shareholder value Leverage scale Capital and cost investments in structure existing dealerships Maintain best-in- class operating Acquire dealerships Operational Capital margins through meeting our continuous effic
Slide 19: 2025 Growth Plan
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX In 2025: >$55/Share EPS CAGR of >31%(2) Resulting <1.0x $6.9B ~$32B 2025 Growth Plan Leverage We are working towards achieving our Acquisitions 5-year plan goal of $32 billion in $7.0B revenue by 2025. Clicklane Robust pipeline of 4x We continue to expand our dig
Slide 20: Clicklane Statistics & Trends
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Clicklane Statistics & Trends Sequential growth each quarter, potential for increased penetration of new vehicles as SAAR increases Volume 8,471 8,471 42% $5.5K 4Q22 Volume New Vehicles Total Front-End 6,594 6,817 Retailed Yield +24% increase Total Front-End PVR
Slide 21: Expanding Our Innovation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Expanding Our Innovation Enhancing the customer experience with dynamic Clicklane features The industry’s leading auto loan marketplace works with 51 lenders, Our redesigned F&I 2.0 menu has banks and credit unions to give driven better consumer consumers choice
Slide 22: 2025 Plan: Clicklane
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX 2025 Plan: Clicklane Multiple growth drivers deliver significant revenue for Clicklane $8.0B Revenue Expanding Clicklane Current volume limited by inventory shortages. Planned advertising campaigns are delayed until inventory recovers. Future growth drivers $2.5B
Slide 23: Total Care Auto
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Total Care Auto TCA is a stand-alone insurance company fully integrated with our dealerships that provides a new profit stream and customer retention tool for Asbury Vehicle Sold (Dealership) Vehicle Service Contracts Key & Remote Replacement • Extensive list of
Slide 24: 2025 Plan: Total Care Auto
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX 2025 Plan: Total Care Auto Integrated insurance provider increasing profitability through ownership of the full guest experience $185M+ EBITDA Seasoned and experienced $140M+ management team built for growth Integration with Clicklane provides further opportunity
Slide 25: 2025 Plan: Used Vehicles
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX 2025 Plan: Used Vehicles How we plan to grow our used vehicle sales through 2025 Proprietary software utilized for strategic 130 inventory management resulting in faster Used Vehicles per turns and higher margins Month per New Dealership Clicklane has proven to b
Slide 26: 2025 Plan: Parts & Service
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX 2025 Plan: Parts & Service Technology enables productivity and transparency, driving higher $’s per repair order (2) 246K Online Service Appointments 92K 4Q17 1Q18 2Q18 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 Digi
Slide 27: Appendix
APPENDIX ABG | Asbury Automotive 27
Slide 28: Debt Maturity Schedule
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Debt Maturity Schedule Our near-term obligations remain minimal with no significant maturities until 2025 ($ in Millions) $661 Senior Notes $800 Mortgages $600 $405 $445 $173 $29 $34 $97 $77 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Note: As of 12/31/2022
Slide 29: Non-GAAP Financial Disclosure
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitabi
Slide 30: Non-GAAP Reconciliation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted income from Operations and Adjusted Operating Margin For the Twelve Months Ended ($ In millions) December 31, 2022 2021 2020 2019 Adjusted income from operations: Income from operations $ 1,272.6 $ 791.8 $ 370.8 $ 325.0 Deal dilig
Slide 31: Non-GAAP Reconciliation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX For the Twelve Months Ended ($ In millions) December 31, 2022 2021 2020 2019 2018 2017 Adjusted EBITDA: Non-GAAP Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 997.3 $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 R
Slide 32: Non-GAAP Reconciliation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX For the Twelve Months Ended (In millions, except per share data) December 31, 2022 2021 2020 2019 2018 2017 Adjusted net income: Net income $ 997.3 $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 Non-core items - (income) expense: Non-GAAP Gain on divestitures, net Deal
Slide 33: Non-GAAP Reconciliation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX ($ In millions) For the Twelve Months Ended December 31, September 30, June 30, March 31, December 31, 2022 2022 2022 2022 2021 Adjusted EBITDA: Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Non-GAAP Net Income $ 997.3
Slide 34: Non-GAAP Reconciliation
HIGHLIGHTS 4Q & FY22 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted Cash Flow from Operations, Adjusted Free Cash Flow and Adjusted Operating Cash Flow Per Share For the Twelve Months Ended (In millions, except per share data) December 31, 2022 2021 2020 2019 2018 2017 Adjusted cash flow from oper
Slide 35: Thank You
Thank You https://www.asburyauto.com 35
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