Slide 1: Third Quarter 2024 Earnings Release
Third Quarter 2024 Earnings Release October 25, 2024 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are, or may be dee
Slide 3: 3Q 2024 Overview
3Q 2024 Overview HIGHLIGHTS New Vehicle units 1% • Executed well in a challenging environment • Sequential share gains reflect full recovery from CDK Used Vehicle units -8% outage • Used PVRs in-line with 2Q 24 Customer Financial Services #1 • CFS PVR sequential increase to ~$2,600 After-Sales Gross
Slide 4: Financial Summary
3Q 2024 Financial Summary ($ in millions, except per share data) 3Q 2023 3Q 2024 YoY Total Revenue $6,893 $6,586 -4% Moderating ASPs and Used unit decline Gross Profit $1,295 $1,183 -9% +2% sequentially, led by CFS and After-Sales growth Adj. SG&A Expense $823 $797 -3% Consistent quarterly run-rate,
Slide 5: New Vehicles
3Q 2024 New Vehicles RETAIL UNITS & PVR 62,289 63,150 • Sequential share gains; stable YoY • PVR moderation stabilizing: • FY 23 – $4,342 – ($-1,600 YoY) • 1Q 24 – $3,328 – ($-325 QoQ) $4,025 • 2Q 24 – $3,108 – ($-220 QoQ) $2,804 • 3Q 24 – $2,804 – ($-304 QoQ) • Disciplined inventory management (DSO
Slide 6: Used Vehicles
3Q 2024 Used Vehicles RETAIL UNITS & PVR 72,517 • Sequential unit volume growth from 2Q 24 66,454 • CDK outage adversely impacted vehicle sourcing, inventory and PVRs – gained momentum in Aug. and Sept. $1,746 $1,589 • Self-sourced ~90% of vehicles during the quarter • Gross PVRs consistent with 2Q
Slide 7: Customer Financial Services
3Q 2024 Customer Financial Services GROSS PROFIT ($M) & GROSS PROFIT PVR $370M $335M • Strong CFS performance continues – $2,741 PVR up 10% from July to September $2,588 • Robust product attachment, finance penetration for new vehicles • Continued growth of AN Finance – superior long-term shareholde
Slide 8: After Sales
3Q 2024 After Sales REVENUE ($M) & GROSS MARGIN (%) $1,157M $1,171M • Continued revenue and margin momentum • Growth led by Warranty and Customer Pay 47.7% • Gross Margin up 50 bps – improved parts 47.2% and labor rates, leverage, and higher value orders • Overcame CDK outage, which impacted July •
Slide 9: Free Cash Flow
YTD 3Q 2024 Free Cash Flow ADJ FCF ($M) & CONVERSION % $850M • Consistent, attractive cash conversion profile $467M • Change from 2023 includes CDK impact 104% 91% • Remain focused on cycle times (e.g. billing, time-to-auction, and service WIP) • Capital investments slightly below prior year YTD 23
Slide 10: Capital Allocation
YTD 3Q 2024 Capital Allocation CAPITAL ALLOCATION ($M) YTD YTD 2023 2024 Capital Expenditures $286 $262 • Continued strong cash conversion provides optionality Debt Repayment (Borrowing)* (300) 90 • CapEx on pace for ~$300 million FY • YTD Average share purchase price of $159 M&A 271 - • Portfolio o
Slide 11: Commentary
3Q 2024 Commentary • Strong performance in challenging environment • New unit growth strength • Used unit margin steady in competitive marketplace • After-Sales growth continues with margin expansion • Continued strong conversion of profit to cash • Portfolio optimization to enhance shareholder valu
Slide 12: Appendix
Appendix This presentation contains certain non-GAAP financial measures as defined under SEC rules, which exclude certain items disclosed in the attached financial tables. As required by SEC rules, the Company provides reconciliations of these measures to the most directly comparable GAAP measures.
Slide 13: Global Financial Crisis to 2024
SELECT HISTORICAL DATA Global Financial Crisis to 2024 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 YTD* FY Avg. SAAR (mm) 13.1 10.3 11.5 12.6 14.3 15.4 16.4 17.4 17.5 17.1 17.2 17.0 14.5 14.9 13.7 15.6 15.6 14.9 New Retail SAAR (mm) 10.6 8.6 9.2 10.3 11.7 12.8 13.
Slide 14: Balance Sheet and Other Items
3Q 2024 Balance Sheet and Other Items ($ in millions) Balance Sheet and Other Highlights 9/30/23 12/31/23 9/30/24 Cash and cash equivalents 64.0 60.8 60.2 Inventory 2,645.6 3,033.4 3,530.8 Floorplan notes payable 2,814.8 3,382.4 3,805.2 Non-recourse debt 246.1 258.4 645.9 Non-vehicle debt 3,942.4 4,
Slide 15: Comparable Basis Reconciliations (Three Months)
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations(1) Three Months Ended September 30, 2023, and September 30, 2024 Income from Continuing Diluted Earnings Per Operating Income Operations Before Income Tax Provision(2) Effective Tax Rate Net Income Share(3) Income Taxes 2023 2024 2023 2024 20
Slide 16: Comparable Basis Reconciliations (Nine Months)
NON-GAAP RECONCILIATIONS Comparable Basis Reconciliations Nine Months Ended September 30, 2023, and September 30, 2024 Income from Continuing Diluted Earnings Per Operating Income Operations Before Income Tax Provision(2) Effective Tax Rate Net Income Share(3) Income Taxes 2023 2024 2023 2024 2023 2
Slide 17: Free Cash Flow Reconciliation
3Q 2024 Free Cash Flow Reconciliation ($ in millions) Free Cash Flow Reconciliation YTD YTD 9/30/23 9/30/24 Net cash provided by operating activities $762.6 $164.9 Net Proceeds from (payments of) 260.4 (24.0) Vehicle Floorplan – non-Trade Increase in Auto loans receivable, net 112.7 588.3 Adj. cash