Autocanada Inc. · TSX:ACQ
Autocanada — Q1 2023 Earnings Presentation
28 slides from Autocanada's earnings presentation, June 2023
Slide 1: AutoCanada Investor Presentation June 2023
AUTOCANADA (TSX:ACQ) INVESTOR PRESENTATION JUNE 2023
Slide 2: Forward-Looking Statements and Non-GAAP and Other Financial Measures
Forward-Looking Statements and Non-GAAP and Other Financial Measures Forward-Looking Statement Certain information contained in this presentation is forward-looking information within the meaning of applicable Canadian securities legislation. The use of any of the words “could”, “expect”, “believe”,
Slide 3: Who We Are
WHO WE ARE
Slide 4: AutoCanada Overview
AutoCanada Overview A Leading Multi-Location Automobile Dealership Group At a Glance1 65 18 • One of Canada’s largest multi-location automobile OEM Franchises in Canada2 OEM Franchises in Illinois, U.S. dealership groups with ~6,000 employees • Only publicly listed auto dealership group in Canada 15
Slide 5: Revenue Diversity Across Brands and Geographies
Revenue Diversity Across Brands and Geographies AUTOCANADA CANADIAN REVENUE MIX1 % of AutoCanada Revenue by Region 1 Segment Segment % Brand Brand Revenue % Acura 1% Honda 4% Hyundai 9% BC AB Infiniti 1% 10.1% 26.3% SK MB Import 31% Kia 2% 6.6% 6.4% Mazda 1% QC Nissan 5% ON 10.4% Subaru 1% 22.8% ATL
Slide 6: Investment Highlights
Investment Highlights Large and Highly Fragmented Canadian Market with Significant Resilient Business Model Strong Stewards of Capital Consolidation Opportunities Accelerated Growth Through Complete Business Model Experienced First Mover Advantage Significant Organic Leadership Team with Canadian Gr
Slide 7: Serving the $197 billion + Market
Large and Highly Fragmented Market – Ample Opportunity for Consolidation > 3,700 Dealerships in Canada AutoCanada NEW 2% VEHICLE MARKET Other Dealers 98% Serving the 1.6 Million New Vehicles 3.1 Million Used Vehicles $197 billion + Market USED VEHICLE Private Franchised New Parties 33.0% Car Dealers
Slide 8: Profitable Product Mix & Diverse Earnings Streams Provide Stability
Profitable Product Mix & Diverse Earnings Streams Provide Stability Complete Business Model Facilitates Higher Margin F&I and PS&CR Sales • New car sales are local monopolies New Used PS&CR F&I that have averaged ~ 2.0% unit sales growth over the long term • Used car sales offer bricks and 6% 17% 11
Slide 9: Growth Pillars
Growth Pillars Strategic Growth Initiatives Driving Industry-Leading Performance GROWTH PILLARS New Used RightRide Parts & Finance & Collision /Used M&A U.S. Vehicles Vehicles Services Insurance Digital Data Analytics Multiple Value Creation Pillars to Drive Enterprise Value 9
Slide 10: Increasing Used Vehicles Sales
Increasing Used Vehicles Sales Industry Leader in Canada • Counter-cyclical to new vehicle sales; no OEM constraints on market share growth; omni-channel strategy • Creates opportunities to capture high margin sales in F&I and PS&CR 2 • Canadian market used to new retail unit ratio2 was 0.7 in 20211
Slide 11: RightRide/Used Digital
RightRide/Used Digital Significant Organic Growth Opportunities RightRide offers ability to offer attractive financing products to credit challenged customers (sub and near prime) o No credit risk retained by AutoCanada • Digital sales and marketing strategy enables customers to apply for credit onl
Slide 12: Parts & Service
Parts & Service Significant Organic Growth Opportunities • Leverage centralized call centre (Business Development Centre or “BDC”) Same Store1 Quarterly Parts, Service & Collision Repair to handle all inbound and outbound service work appointment bookings Gross Profit ($M) 64.6 64.6 64.7 • Managemen
Slide 13: Collision Centre Expansion
Collision Centre Expansion Currently 27 locations across Canada with Opportunity to Meaningfully Expand Network • Strategy prioritizes access to OEM repair procedures, OEM certifications and OEM parts procurement • Large, fragmented and mature market which benefits consolidator • Dedicated leadershi
Slide 14: Drive Growth Through Optimization of Finance & Insurance
Drive Growth Through Optimization of Finance & Insurance Resilienc y Leading F&I GPU across North America • Dedicated and focused F&I team leading efforts across all dealerships Same Store1 Quarterly F&I Gross Profit ($M) • F&I amplifies gross margin contributions from New and Used Vehicle sales 68.
Slide 15: Generated $181M of Free Cash Flow Q1 2023 TTM
Generated $181M of Free Cash Flow Q1 2023 TTM Total Net Funded Debt to Bank EBITDA Leverage Ratio of 2.3x DISCIPLINED MANAGEMENT OF LEVERAGE EBITDA TOTAL NET FUNDED DEBT Q1 2023 ($M) Revolving term facility - Credit Facility 184.2 Senior Unsecured Notes 344.7 Other funded debt according to Credit Fa
Slide 16: Capital Allocation Strategy
Capital Allocation Strategy Strong Stewards of Capital • AutoCanada capital allocation aligned with business strategy, growth opportunities and free cash flow profile CAPITAL ALLOCATION PRIORITIES Organic Growth / Internal M&A / Strategic Liability Management Return to Shareholders Investment Partne
Slide 17: Well Positioned for Industry Consolidation Through Disciplined M&A Strategy
Well Positioned for Industry Consolidation Through Disciplined M&A Strategy Significant Consolidation Opportunities Acquisitions are a key part of • Advance and actively assess strategic acquisition capital allocation strategy opportunities and develop a robust acquisition pipeline Disciplined appro
Slide 18: Recent Acquisitions
Recent Acquisitions Executing on Robust Pipeline of Opportunities Date Company Location Type Description May 2022 Audi Windsor and Porsche of London Ontario Dealerships • Adds 2 dealerships, geographic diversification and adds Porsche to Canada Jun. 2022 Burwell Auto Body London, ON Collision • Expa
Slide 19: Management Team With Proven Track Record Driving Vision & Strategy
Management Team With Proven Track Record Driving Vision & Strategy Recently Expanded Leadership Team v Peter Hong Jeffrey Thorpe Paul Antony Azim Lalani Chief Strategy Officer & General President, Canadian Operations Executive Chairman Chief Financial Officer Counsel Joined April 2022 Joined May 201
Slide 20: Environment, Social & Governance (ESG) Overview
Environment, Social & Governance (ESG) Overview Focus on areas that positively impact our business and society • We are committed to responsible business practices and driving continuous improvement of our operations and our relationships with our employees and the communities in which we live and w
Slide 21: In Conclusion – Key Takeaways
In Conclusion – Key Takeaways • We have executed well on building out our ‘Complete’ Business Model o Progress on initiatives to grow New, Used, F&I, and PS&CR driving resiliency o Able to deliver top decile performance in any economic environment • Strengthened balance sheet, strong cash flow and c
Slide 22: Q1 2023 Results
Q1 2023 RESULTS
Slide 23: Q1 2023 Results Overview
Q1 2023 Results Overview Record First Quarter Revenue • Revenue was highest first quarter revenue reported in Company’s history • Consolidated used to new retail unit ratio1 improved to 1.74 from 1.55 last year; TTM improved to 1.80 at Q1 2023 compared to 1.45 at Q1 2022 • Net income for the period
Slide 24: Q1 2023 Results Continued
Q1 2023 Results Continued First Quarter Results ($M, unless otherwise noted) Q1 2023 Q1 2022 Change Consolidated Revenue 1,539.3 1,342.4 +15% Gross Profit %1 16.6% 18.4% -1.9 ppts Adjusted EBITDA1 45.0 62.2 -28% Adjusted EBITDA1% 2.9% 4.6% -1.7 ppts Same Store Used to New Ratio1 1.64 1.56 +8% Total
Slide 25: Q1 2023 Results Continued
Q1 2023 Results Continued Operations Results - Used & F&I Key Drivers CONSOLIDATED ADJUSTED EBITDA1 ($M) 4.6% 4.5% 4.7% 3.6% 75.6 76.4 2.9% TTM Consolidated Adjusted EBITDA1 $247.6 million 62.2 50.7 45.0 TTM Canadian Operations Adjusted EBITDA1 $223.2 million TTM U.S. Operations Adjusted EBITDA -2.2
Slide 26: Appendix
APPENDIX
Slide 27: Dealership Locations and Brands
Dealership Locations and Brands Geographic and Brand Diversification AutoCanada Owns Some of the Best Performing Dealerships in Canada British Columbia Alberta Abbotsford Volkswagen Airdrie Dodge Fish Creek Nissan Grande Prairie Volkswagen Ponoka Chrysler 2022 Dealership Awards Chilliwack Volkswagen
Slide 28: Thank You
AUTOCANADA THANK YOU INVESTORS.AUTOCAN.CA