Asbury Automotive Group Inc · NYSE:ABG

Asbury Automotive — Conference Presentation (November 2021)

36 slides from Asbury Automotive's conference presentation, Nov 30, 2021

  1. Slide 1: Investor Conference Presentation November/December 2021

    1 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Investor Conference Presentation November/December| 2021

  2. Slide 2: Forward-looking statements

    2 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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 relati

  3. Slide 3: Mission & Vision

    3 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Mission & Vision North Star is the “Guest Experience”

  4. Slide 4: Fortune Automotive Retailer Q3 2021

    4 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG FORTUNE AUTOMOTIVE RETAILER 500 Q3 / 2021 26% 3% 5% 33% 15% 3% 6% 3% 6% 91(3) Locations 112(3) Franchises 31(3) Brands ~$8B TOTAL REVENUE (1) New Vehicle Revenue(2) Q 3 H IG H LI G H TS New PVR $5,088/+106% Used Retail PVR $2,475/+17%

  5. Slide 5: Very attractive, diversified portfolio of brands

    5 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Very attractive, diversified portfolio of brands Attractive Brand Mix (Based on New Vehicle Revenue – September ‘21 YTD) Luxury - 45% Import - 40% Domestic - 15%

  6. Slide 6: Our Strategy

    6 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Our Strategy Two fundamental principles to drive shareholder value ❑ Attract and retain the best talent ❑ Implement best practices and improve productivity ❑ Provide an exceptional guest experience ❑ Leverage our scale and cost structu

  7. Slide 7: Company history and EPS growth phases

    7 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Decentralized Roll-up ▪ Delivered 9% EPS growth per year ▪ Formed 1995; IPO Mar 2002 with 86 stores ▪ Decentralized management, systems, and processes Recession & Restructure • Delivered 13% EPS growth per year from Peak SAAR to Peak S

  8. Slide 8: Multiple Potential Drivers of Growth: Growth Plan

    8 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Multiple Potential Drivers of Growth: Growth Plan(1) Focused, disciplined execution and capital allocation to drive revenue growth and profitability (1) These goals are forward-looking statements that are based on assumptions that are

  9. Slide 9: Digital Platforms Enhancing Productivity

    9 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Digital Platforms Enhancing Productivity Omni-channel initiatives are driving sales, creating operational efficiencies and enhancing the guest experience ❑ Industry leading data aggregation, deployment, and messaging services ❑ Redesig

  10. Slide 10: Advertising Spend and Online Service Appointments

    10 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Advertising Spend and Online Service Appointments Digital is driving business growth and enhancing the customer experience; quarterly online service appointment volume has grown ~475% since Q1‘16 O n lin e Se rv ic e A p p o in tm en

  11. Slide 11: The Four Key Components of Our Business

    11 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG (Q3 2021) The Four Key Components of Our Business Used, Parts & Service and F&I account for 53% of revenue and 74% of gross profit

  12. Slide 12: YTD Front-End Yield and PVR Trends

    12 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG YTD Front-End Yield and PVR Trends 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 Septembe

  13. Slide 13: F&I performance

    13 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Solid training and execution continue to drive F&I performance Note: Excludes discontinued operations (Same store) F&I Gross Profit per Unit Sold F&I GP PVR 5.2% Average Annual Growth

  14. Slide 14: Parts & Services Gross Profit

    14 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Total Fixed GP $ 4.4% Average Annual Growth (1) Performance of stores continuously owned and operated since 2003; (2) 2020 results were adversely impacted by the COVID-19 pandemic (1) (1,2) Parts & Services Gross Profit More units in

  15. Slide 15: Leverage Varies Based on Business Conditions

    15 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Long Term Favorable Low Executed Low Bottom Leverage Varies Based on Business Conditions and Environment Equilibrium leverage target range balances financial flexibility with an efficient capital structure High Unfavorable Anticipated

  16. Slide 16: Environmental, Social, and Governance Impact

    16 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Environmental, Social, and Governance (“ESG”) Impact We have dedicated significant resources toward enhancing our ESG footprint… Minimizing Impact on the Environment • Recycling – cardboard, glass, plastic, motor oil, tires • Reclaimi

  17. Slide 17: ESG at a Glance

    17 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Raised $ to provide food and supplies to students at low-income schools during Winter break in 2020 40 HOURS PTO provided to volunteer with our community partners 33% of Board of Directors are female, and we’re committed to ongoing bo

  18. Slide 18: Summary

    18 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG ❑ 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 exp

  19. Slide 19: Acquisitions

    19 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Acquisitions

  20. Slide 20: Larry H. Miller Dealerships and Total Care Auto Overview

    20 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Larry H. Miller Dealerships and Total Care Auto, Powered by Landcar(1) Overview 8th LARGEST dealership group in the US(2) FAMILY-OWNED business since 1979 54 new vehicle dealerships; 7 used vehicle dealerships; 11 collision centers 18

  21. Slide 21: Geographic Expansion into Strategic High-Growth Markets

    21 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Other Acquisitions(2) (10) Source: IHS Markit, US Census Bureau (1) Excludes used dealerships and collision centers; does not account for anticipated dispositions (2) Includes acquisitions of Stevinson, AH and KC 5.1% 6.2% 3.7% 4.8% 1

  22. Slide 22: Dealership Portfolio Aligned to Customer Brand Preferences

    22 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 263 203 163 145 143 108 89 89 77 67 0 50 100 150 200 250 300 Toyota CDJR Ford Honda Chevrolet Subaru Hyundai Nissan Kia Buick GMC Import Domestic Dealership Portfolio is Highly Aligned to Customer Brand Preferences in its Markets Sour

  23. Slide 23: Diverse Pro Forma Brand Portfolio

    23 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 15% 11% 4% 4% 1% 4% 9% 8% 3% 2% 2% 2% 1% 3% 15% 9% 5% 2% Asbury’s Diverse Pro Forma Brand Portfolio Strategically Aligns to Customer Preferences Across All of its Markets Based on LTM September 30, 2021 New Vehicle Revenue(1) Note: Pr

  24. Slide 24: TCA Offerings

    24 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG TCA Offerings Vehicle service contracts ✓ Extensive list of vehicle parts and systems ✓ High sales and service retention Prepaid maintenance ✓ Customizable plans ✓ Oil and filter changes, lubrication Protection plans ✓ Vehicle theft a

  25. Slide 25: Revenue Growth and Margin Expansion from Integration of TCA

    25 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Significant Potential for Revenue Growth and Margin Expansion from Integration of TCA Incremental F&I Income from Integration of TCA (YTD Sep-21) LHM / TCA combined F&I income $190M LHM F&I revenue less cost of sales LHM NV and UV ret

  26. Slide 26: Significant Increase in Larry H. Miller Q3 EBITDA

    26 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG LHM’s Q3 2021 EBITDA growth and additional day 1 synergies drove a 31% increase in LTM 9/30/21 over LTM 6/30/21 Note: numbers may not add to $475M due to rounding (1) Q3 2020 vs. Q3 2021 (2) Includes acquisitions of Stevinson, AH and

  27. Slide 27: Strong Balance Sheet and Operating Cash Flow

    27 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG ✓ Strong free cash flow generation ✓ Highly accretive earnings ✓ Invest in rolling out Clicklane to acquired dealerships to accelerate growth of online channel ✓ Invest in the integration of TCA with existing dealership operations, fu

  28. Slide 28: Transaction rationale

    28 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Meaningfully increases Asbury’s scale and creates the 4th largest US automotive retailer based on sales2 LHM represents a strong portfolio of dealerships with a long history of operational excellence and valuable brands1 Enhances Asbu

  29. Slide 29: Appendix

    29 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Appendix

  30. Slide 30: Q3 2021 results highlights

    30 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG ❑ 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 u

  31. Slide 31: Q3 2021 Earnings Highlights & Key Metrics

    31 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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% Margi

  32. Slide 32: Non-GAAP Financial Disclosure and Reconciliation

    32 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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 th

  33. Slide 33: Non-GAAP Reconciliation: Adjusted Diluted EPS

    33 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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 sa

  34. Slide 34: Adjusted Income from Operations and Adjusted EBITDA

    34 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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

  35. Slide 35: Non-GAAP Reconciliation: Adjusted SG&A and Leverage

    35 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG 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 settlemen

  36. Slide 36: Non-GAAP Reconciliation: Adjusted EBITDA

    36 © Asbury Automotive Group 2021. All rights reserved.NYSE | ABG Non-GAAP Reconciliation ($ in Millions) Adjusted EBITDA Q3'21 LTM 2020 2019 2018 Total Revenue 9,416.9$ 7,131.8$ 7,210.3$ 6,874.4$ Net Income 481.0 254.4 184.4 168.0 Add: Depreciation and amortization 40.1 38.5 36.2 33.7 Income tax ex

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