Asbury Automotive Group Inc · NYSE:ABG
Asbury Automotive — Q2 2022 Earnings Presentation
41 slides from Asbury Automotive's earnings presentation, Jul 28, 2022
Slide 1: Investor Relations Presentation
July 2022 INVESTOR RELATIONS PRESENTATION NYSE: 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: Asbury brands and culture
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Slide 4: Our Agenda
Our Agenda July 28, 2022 01 Company Highlights 02 Second Quarter 2022 Review 03 Growth Strategy 04 Appendix 4
Slide 5: Company Highlights
COMPANY HIGHLIGHTS ABG | Asbury Automotive 5
Slide 6: Company Highlights
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Company Highlights 1 Total Care Auto WA Integrated F&I 4 2.1x Product Provider Adjust Net ID Leverage (3,4) $15 BILLION 21 21 9 Total Revenue(1) $1,009M 2 UT 6 4 CO IN CA MO VA 5TH LARGEST(2) Automotive Retailer 9 12 6 5 Available NC AZ Liquidity (3) NM 17 SC 14
Slide 7: Attractive Brand Mix
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Attractive Brand Mix A diversified portfolio with the right brands in the right markets (Based on New Vehicle Revenue – YTD 2Q22) Luxury Imports Lexus 10% Toyota 17% Mercedes-Benz 8% Honda 9% Luxury Domestic BMW 3% Hyundai 5% 30% 30% Acura 2% Nissan 4% Porsche 2%
Slide 8: The Four Key Components
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX THE FOUR KEY COMPONENTS Diversified business mix provides multiple profit streams that are independent of SAAR (YTD 2Q22) 5% F&I 13% 24% Parts & Service Independent Used of SAAR 35% New 35% 13% 47% 28% Revenue Gross Profit 8 NYSE: ABG
Slide 9: Second Quarter 2022
SECOND QUARTER 2022 ABG | Asbury Automotive
Slide 10: Summary
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Summary Q2 2022 Year-Over-Year Growth Revenue Strategic Highlights All Company Same Store Delivered all-time record adjusted EPS and Total 53% (7%) EBITDA Sold almost 6,600 vehicles via Clicklane, New Vehicle 36% (22%) our fully transactional online tool Generate
Slide 11: Operating Income & Margin Trend
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Operating Income & Margin Trend We consistently deliver best in class operating efficiency 8.3% 8.1% 7.4% Adj. Operating Margin Increased year to date: 5.7% • adjusted operating income by $793 $304 million or 87% and 4.6% • adjusted operating margin by 90 bps $65
Slide 12: Cash Flow Summary
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Cash Flow Summary As a larger company with more robust operating cash flow, we have increased capacity for capital deployment in strategic acquisitions and share repurchases $31.45 Adj. Operating Cash $24.17 Flow per Share $22.93 $632 $558 Increased year to date:
Slide 13: Growth Strategy Update
GROWTH STRATEGY UPDATE 2025 PLAN
Slide 14: Our Strategy
HIGHLIGHTS QUARTER 2 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 15: 2025 Growth Plan
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Target in 2025: >$55/Share EPS CAGR of >31%(2) Leverage <1.0x $6.2B ~$32B 2025 Growth Plan We remain on target to achieve our 5- Acquisitions $7.4B year plan goal of $32 billion in revenue by 2025. Clicklane Robust $3.1B pipeline of 4x We continue to expand our d
Slide 16: A Digital Experience
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX A Digital Experience Clicklane provides a full digital ecosystem for every aspect of car ownership Buying Buy a car 100% online. Finance, trade, protect and sign all online Ownership Unified ecosystem designed to offer all aspects of a guest's vehicle lifecycle S
Slide 17: Clicklane Projections
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane Projections 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 $2.2
Slide 18: Key Clicklane Statistics
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Key Clicklane Statistics A fast, efficient process that delivers value to our guests and shareholders 6,594(1) 37% $5.9K Actual Volume % New Cars Total Front-End Yield 2Q22 sales volume 37% of cars sold Total Front-End PVR are new cars $3,765 F&I PVR $2,162 90% 8
Slide 19: Clicklane F&I Redesign
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane F&I Redesign A newly redesigned F&I menu gives the customer more options Current F&I Design 19 NYSE: ABG
Slide 20: Clicklane F&I Redesign
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane F&I Redesign A newly redesigned F&I menu gives the customer more options NEW F&I Design 20 NYSE: ABG
Slide 21: Clicklane F&I Redesign
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane F&I Redesign F&I 2.0 will now bring our customers even closer to the in-store experience by offering pre-built bundles. Bundling differentiated products and services frequently delivers more perceived value to customers when compared to a la carte produ
Slide 22: Clicklane F&I Redesign
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane F&I Redesign Allowing a customer to choose from a list of bundles will reduce the effort of having to research and add individual products to their deal, making it easier to add multiple products with just one click. The new design also provides the opt
Slide 23: Clicklane Ownership Ecosystem
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane Ownership Ecosystem The ownership portal allows the guest to manage every aspect of their vehicle Everything a car owner needs in one ecosystem 23 NYSE: ABG
Slide 24: Clicklane Ownership Ecosystem
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane Ownership Ecosystem Guests can utilize revolutionary online photo estimating software from our Body Shops! 24 NYSE: ABG
Slide 25: Clicklane Ownership Ecosystem
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane Ownership Ecosystem Full accessories catalog visualizer available with real-time pricing for our guests Choose from a selection of parts that are specific to the owned vehicle 25 NYSE: ABG
Slide 26: Clicklane Ownership Ecosystem
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Clicklane Ownership Ecosystem A customer can easily upgrade or buy new tires specific for their car 26 NYSE: ABG
Slide 27: Total Care Auto
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Total Care Auto TCA is a stand-alone insurance company fully integrated with our dealerships that provides a new profit stream for Asbury Vehicle Sold (Dealership) Vehicle Service Contracts Key & Remote Replacement • Extensive list of vehicle parts and • 24-hour
Slide 28: Total Care Auto
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Total Care Auto Integrated insurance provider increasing profitability through ownership of the full guest experience $185M EBITDA Seasoned and experienced management team built for $125M growth Integration with Clicklane provides further opportunity for growth F
Slide 29: 2025 Plan: Used Vehicles
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX 2025 Plan: Used Vehicles How we plan to grow our used vehicle sales through 2025 Proprietary software utilized for strategic inventory management resulting in faster turns and higher margins Clicklane has proven to be a fast, transparent, and convenient online tr
Slide 30: 2025 Plan: Parts & Service
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX 2025 Plan: Parts & Service Technology enables productivity and transparency driving higher $s per repair order Focus on technology to drive employee Increase service retention through our level productivity of service and utilizing technology • Online appointment
Slide 31: Appendix
APPENDIX ABG | Asbury Automotive
Slide 32: Capital Allocation History
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Capital Allocation History We have a track record of prudent capital allocation YTD ‘14-’17 2018 2019 2020 2021 2Q22 Acquisitions $615M Revenue Acquired $220M Revenue Acquired $425M Revenue Acquired $1.8B Revenue Acquired $5.8B(2) Revenue Acquired N/A ▪ Dealershi
Slide 33: Leverage Varies Based on Business Conditions & Environment
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Leverage Varies Based on Business Conditions & Environment Equilibrium leverage target range balances financial flexibility with an efficient capital structure 2.5x Normal Target Range 3.0x NET DEBT/EBITDA Factors Influencing Leverage Top ECONOMIC CYCLE Bottom Hi
Slide 34: Debt Maturity Schedule
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Debt Maturity Schedule Our near-term obligations remain minimal with no significant maturities until 2025 ($ in Millions) Senior Notes Mortgages $800 $600 $405 $445 $42 $40 $14 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Note: Date as of 6/30/2022; Exc
Slide 35: Non-GAAP Financial Disclosure
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitabi
Slide 36: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted income from Operations and Adjusted Operating Margin For the Twelve Months Ended For the Six Months ($ In millions) December 31, Ended June 30, 2021 2020 2019 2022 2021 Adjusted income from operations: Income from operations $ 791
Slide 37: Non-GAAP Reconciliation: Adjusted EBITDA
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted EBITDA 37 NYSE: ABG
Slide 38: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX (In millions, except per share data) For the Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Adjusted net income: Net income $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 Non-core items - (income) expense: Gain on dealership divestitures (8.0) (62.3) (11.7) —
Slide 39: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX For the Twelve ($ In millions) Months Ended June 30, 2022 Adjusted EBITDA: Non-GAAP Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 726.6 Reconciliation Depreciation and amortization Income tax expense 58.5 2
Slide 40: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 2 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted Cash Flow from Operations 40 NYSE: ABG
Slide 41: Thank You
Thank You https://www.asburyauto.com 41
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