Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (February 2021)
50 slides from Sonic Automotive's investor presentation, Feb 17, 2021
Slide 1: Sonic Automotive – Investor Presentation February 2021
Sonic Automotive – Investor Presentation February 2021 Updated February 17, 2021 Exhibit 99.2
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events, are not historical facts and are based on our current expectations and assumptions regarding our
Slide 3: Company Overview
3 Company Overview
Slide 4: Sonic Automotive: Who We Are
4 Sonic Automotive: Who We Are QUICK FACTS Our High Growth EchoPark Segment Offers a Unique Approach to Pre-Owned Vehicle and F&I Sales Below-Market Pricing with a No Haggle Purchase Experience Drives Industry-Leading Used Vehicle Volume Throughput (NYSE: SAH) a Fortune 500 Company and One of the Na
Slide 5: Investment Highlights
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expens
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 28% CA 26%CO 10% TN 7% FL 7% AL 6% NC 5% GA 3% VA 2% MD 2% SC 2% NV 2% Concentrated in Major Metro Markets Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of To
Slide 7: Revenue Composition – Diversified Revenue Streams
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2020 5% 34% 13% 42% 39% 7%43% 17% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distributio
Slide 8: EchoPark Automotive – A Unique Growth Story
8 EchoPark Automotive – A Unique Growth Story Expansion Plan For 140+ Point Distribution Network By 2025 Unique, High Return Business Model 1 to 4-Year-Old Vehicles - Nearly New With Remaining OEM Warranty 30% of Guests Travel More Than 30 Minutes To Shop Our Inventory 10% Below Market Pricing With
Slide 9: EchoPark – High Volume Model Drives Superior Returns
9 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark B (W) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,400 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,200 $2,150 ($1,050) Volume Differential Factor x1 X
Slide 10: Complementary Relationship Between Segments
10 Franchised Dealerships Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diverse Revenue Streams - Some Recession-Resistant • Relatively Low Fixed Costs And Multiple Operational Levers • Further Growth Opportu
Slide 11: Industry-Leading Used Vehicle Volume Throughput
11 Industry-Leading Used Vehicle Volume Throughput 83 104 101 Peer Average* Sonic Franchised (Q3 2020) Sonic Franchised (Q4 2020) * Peer Average Is Store Count As Of And Unit Sales For The Quarter Ended September 30, 2020 (Q4 2020 Data Not Available As Of Date Of This Report) For ABG, AN, GPI, LAD A
Slide 12: Inventory Management Expertise
12 Inventory Management Expertise 43 30 30 Peer Average* Sonic Franchised (September 30, 2020) Sonic Franchised (December 31, 2020) * Peer Average Is As Of September 30, 2020 (December 31, 2020 Data Not Available As Of Date Of This Report) For ABG, AN, GPI, LAD And PAG ** CarMax Data Is As Of Novemb
Slide 13: Strategic Direction
13 Strategic Direction Drive New And Used Vehicle Profit Growth Through Multiple Channels (Traditional Sale Or Lease, Online Selling, Alternative Sources Of Inventory) Continued Growth Opportunity In Parts & Service, F&I Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Manag
Slide 14: EchoPark
Sonic) EchoPark
Slide 15: EchoPark – Brand Promise
15 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To 10% Below Used Vehicle Market Price High Quality, Low Mileage Vehicle With Existing Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Zero Reported Accidents On C
Slide 16: EchoPark – Developing Nationwide Distribution Network
16 EchoPark – Developing Nationwide Distribution Network Existing Retail Hub Existing Delivery & Buy Center Delivery & Buy Center Coverage Area 140+ Point Distribution Network By 2025 New Retail Hub To Open In 2021-2022
Slide 17: EchoPark – Modeled 4-Wall Economics At Maturity
17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery & Buy Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410
Slide 18: EchoPark – Delivery & Buy Center Model
18 EchoPark – Delivery & Buy Center Model Existing Retail Hub Delivery & Buy Center Market Coverage Opportunity Delivery & Buy Center Model • Utilize Existing Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory In Surrounding Markets • Drive Incremental
Slide 19: EchoPark – 5-Year Accelerated Growth Forecast
19 EchoPark – 5-Year Accelerated Growth Forecast 57,161 575,000 FY 2020 FY 2025E Retail Unit Sales Volume FY 2020 FY 2025E $1.4 $14.0 Total Revenues (In Billions) 58% CAGR $221.0 FY 2020 FY 2025E Pre-Tax Profit (Loss) (In Millions) ($1.1) $11.0 $261.0 FY 2020 FY 2025E EBITDA (In Millions) Rate Of Ex
Slide 20: EchoPark – Growth Path
20 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 $- $50 $100 $150 $200 $250 $300 $350 $400 $450 Q4 2014 Q1 2015 Q2 2
Slide 21: EchoPark – Adjusted EBITDA Trend
21 EchoPark – Adjusted EBITDA Trend ($2,802) ($1,115) ($3,353) ($2,168) ($3,029) ($2,059) $4,957 $4,792 $6,352 $5,299 $5,169 $5,569 $3,149 ($2,921) $6,093 $6,214 $6,831 $4,804 $(290) $(4,000) $(2,000) $- $2,000 $4,000 $6,000 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4
Slide 22: EchoPark – Market Maturity Comparison
22 EchoPark – Market Maturity Comparison - 150 300 450 600 750 900 1,050 1,200 1,350 1,500 1,650 1,800 Denver/Colorado Springs Dallas San Antonio Charlotte Houston Long Beach Tampa Nashville Atlanta Average Monthly Retail Unit Volume Q4 2020 Q4 2019 Note – Delivery & Buy Center Sales are Included in
Slide 23: Franchised Dealerships
23 Franchised Dealerships
Slide 24: Franchised Dealerships
24 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) Franchised Dealerships Franchised Dealerships84 Brands, Luxury Weighted20+ New & hicle Sales Parts & r i (P&S) Finance & Insurance (F&I) Collision Repair Centers14 20 Major Metropolitan Markets Focused On Inventory Mix and A
Slide 25: Franchised Dealerships – Geographic Footprint
25 Franchised Dealerships – Geographic Footprint Platforms in Major Metro Markets Headquartered in Charlotte, NC 84 Stores, 20+ Brands, 14 Collision Repair Centers
Slide 26: Franchised Dealerships – Strategic Levers
26 Franchised Dealerships – Strategic Levers Multiple Growth Drivers Divest Underperforming or Capital-Intensive Stores Grow Parts and Service Maximize F&I Penetration Used Vehicle Volume Throughput Inventory Sourcing Apply EchoPark Learnings Omni-Channel Platform SG&A Expense Discipline Acquire Pot
Slide 27: Omni-Channel Strategy
27 Omni-Channel Strategy
Slide 28: Full Omni-Channel Infrastructure
28 Full Omni-Channel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary
Slide 29: Buy & Sell Your Way
29 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • In
Slide 30: Q4 & FY 2020 Financial Snapshot
30 Q4 & FY 2020 Financial Snapshot
Slide 31: Q4 2020 – Consolidated Continuing Operations
31 Q4 2020 – Consolidated Continuing Operations B/(W) than Q4 2019 (In millions, except per share data) Q4 2020 $ % Revenues $2,798.6 $50.1 1.8% Gross profit $389.1 ($4.8) (1.2%) SG&A expenses $259.0 $1.9 0.7% SG&A expenses as % of gross profit 66.6% (40) bps Earnings from continuing operations befo
Slide 32: FY 2020 – Consolidated Continuing Operations
32 FY 2020 – Consolidated Continuing Operations B/(W) than FY 2019 (In millions, except per share data) FY 2020 $ % Revenues $9,767.0 ($687.3) (6.6%) Gross profit $1,423.6 ($97.4) (6.4%) SG&A expenses $1,028.7 $70.7 6.4% SG&A expenses as % of gross profit 72.3% 0 bps Earnings (loss) from continuing
Slide 33: Strong Balance Sheet And Liquidity
33 Strong Balance Sheet And Liquidity December 31, 2020 December 31, 2019 (In Millions) Cash and cash equivalents 170.3$ 29.1$ Availability under the 2016 Revolving Credit Facility 214.7 230.7 Availability under our used vehicle floor plan facilities(1) - 17.1 Availability under the 2019 Mortgage Fa
Slide 34: Capital Expenditure Discipline
34 Capital Expenditure Discipline Strict Capital Allocation Strategy Prioritizes Highest Return On Investment Actual FY 2020 Capital Expenditures Of $74.0 Million, Net Of Mortgage Proceeds FY 2021E Includes Plans For 25 Additional EchoPark Locations $181.2 $87.8 $89.3 $92.4 $100.0 $53.0 $75.8 $36.3
Slide 35: Appendix
35 Appendix
Slide 36: Non-GAAP Reconciliation – Adjusted SG&A Expenses (Q4)
36 Non-GAAP Reconciliation – Adjusted SG&A Expenses Better / (Worse) Q4 2020 Q4 2019 Change % Change Reported : (In millions) Compensation $ 176.1 $ 184.5 $ 8.4 4.6 % Advertising 10.5 14.5 4.0 27.6 % Rent 13.6 13.3 (0.3) (2.3)% Other 58.8 48.6 (10.2) (21.0)% Total SG&A expenses $ 259.0 $ 260.9 $ 1.9
Slide 37: Non-GAAP Reconciliation – Adjusted SG&A Expenses (FY)
37 Non-GAAP Reconciliation – Adjusted SG&A Expenses Better / (Worse) FY 2020 FY 2019 Change % Change Reported : (In millions) Compensation $ 659.8 $ 733.9 $ 74.1 10.1 % Advertising 42.2 60.8 18.6 30.6 % Rent 54.5 54.6 0.1 0.2 % Other 272.8 250.1 (22.7) (9.1)% Total SG&A expenses $ 1,029.3 $ 1,099.4
Slide 38: Non-GAAP Reconciliation – Earnings Per Share (Q4)
38 Non-GAAP Reconciliation – Earnings Per Share Q4 2020 Q4 2019 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations 44,022 57,483$ 1.31$ 44,463 46,270$
Slide 39: Non-GAAP Reconciliation – Earnings Per Share (FY)
39 Non-GAAP Reconciliation – Earnings Per Share FY 2020 FY 2019 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations(1) 42,483 (50,664)$ (1.19)$ 43,710
Slide 40: Non-GAAP Reconciliation – Segment Income (Q4)
40 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q4 2020 Q4 2019 Q4 2020 Q4 2019 Q4 2020 Q4 2019 Revenues 2,411.6$ 2,439.9$ 386.9$ 308.6$ 2,798.6$ 2,748.4$ Gross profit 363.0$ 364.6$ 26.1$ 29.2$ 389.1$ 393.9$ SG&
Slide 41: Non-GAAP Reconciliation – Segment Income (FY)
41 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2020 FY 2019 FY 2020 FY 2019 FY 2020 FY 2019 Revenues 8,348.1$ 9,292.3$ 1,419.0$ 1,162.0$ 9,767.0$ 10,454.3$ Gross profit 1,309.4$ 1,408.6$ 114.2$ 112.4$ 1,423.
Slide 42: Non-GAAP Reconciliation – Adjusted EBITDA
42 Non-GAAP Reconciliation – Adjusted EBITDA (In thousands) FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Net Income (Loss) 93,193$ 92,983$ 51,650$ 144,137$ (51,385)$ Provision For Income Taxes 59,899 13,198 22,645 54,954 15,619 Income (Loss) Before Taxes 153,092$ 106,181$ 74,295$ 199,091$ (35,766)$ Non-F
Slide 43: Non-GAAP Reconciliation – Adjusted EBITDA (Q4)
43 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 57,339 $ 46,307 Provision For Income Taxes 32,845
Slide 44: Non-GAAP Reconciliation – Adjusted EBITDA (Q3)
44 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 59,818 $ 29,010 Provision For Income Taxes 20,620
Slide 45: Non-GAAP Reconciliation – Adjusted EBITDA (Q2)
45 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ (199,333) $ 42,221 Provision For Income Taxes (44
Slide 46: Non-GAAP Reconciliation – Adjusted EBITDA (Q3 2019/Q2 2018)
46 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 29,010 $ 15,118 Provision For Income Taxes 11,307
Slide 47: Non-GAAP Reconciliation – Adjusted EBITDA
47 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 42,221 $ (2,194) Provision For Income Taxes 18,93
Slide 48: Non-GAAP Reconciliation – Adjusted EBITDA
48 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) (In thousands) Net Income (Loss) $ 15,118 $ 19,440 Provision For Income Taxes 7,262
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Slide 50: Investor Relations Contacts
Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220
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