Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q3 2018 Earnings Presentation
28 slides from Penske Automotive's earnings presentation, Oct 25, 2018
Slide 1: Third Quarter 2018 Financial Results & Update
Third Quarter 2018 Financial Results & Update
Slide 2: Forward-looking statements
Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s financial results, future sales, earnings potential, and liquidity. Actual results may vary materially because of risks and uncertainties that are di
Slide 3: Diversification
Diversification AUTOMOTIVE STAND-ALONE COMMERCIAL COMMERCIAL TRUCK DEALERSHIPS USED VEHICLE TRUCK DISTRIBUTION TRANSPORTATION* RETAIL SUPERCENTERS & POWER SYSTEMS • U.S. • CarSense (U.S.) • Premier Truck • Australia • Full-Service • U.K. Group Truck Leasing • CarShop (U.K.) • New Zealand • Germany •
Slide 4: Penske Automotive Group Overview
Penske Automotive Group Overview • A diversified transportation services company with estimated annual revenues in excess of $22 billion • Operations across four continents and nine countries • 279 Retail automotive locations world-wide • 265 Automotive dealerships • 14 Stand-alone used vehicle Supe
Slide 5: Third Quarter 2018
THIRD QUARTER 2018
Slide 6: Q3 2018 Overview
Q3 2018 Overview • Record third quarter retail unit sales, revenue, income from continuing operations and earnings per share • Retailed 130,933 new and used automotive units, +0.5% • Q3 Total Revenue +2.4% to $5.7 billion • SG&A Expenses to Gross Profit declined 80 basis points to 77.7% • EBT increa
Slide 7: Q3 2018 Key Takeaways
Q3 2018 Key Takeaways Retail Automotive Heavy-Duty Truck Retail • Used to New Ratio 1.22 to 1 • 33.8% Same-Store Unit Growth • New Vehicle Gross Penske Truck Leasing +$173/unit • Used Vehicle Gross • 25.4% Same-Store Revenue Growth • PTL investment generated +$28/unit $40.7 million in Equity Earning
Slide 8: Q3 2018 Performance Metrics
Q3 2018 Performance Metrics F/X = Foreign Exchange YOY CHANGE ACTUAL Change Ex. F/X Same-Store Units New Vehicles 58,463 (6.6%) n/a Used Vehicles 65,336 +2.1% n/a Total 123,799 (2.2%) n/a Same-Store Retail Revenue New Vehicles $2,324.3 (4.2%) (4.0%) Used Vehicles $1,729.5 +6.1% +6.3% Finance & Insur
Slide 9: Appendix Table of Contents
Appendix Table of Contents Page # Revenue and EBT 10 Retail Automotive 11 - 12 Stand-Alone Used Vehicle SuperCenters 13 -15 E-Commerce 16 - 17 N. American Commercial Truck Dealerships 18 - 21 Penske Truck Leasing 22 - 24 Non-GAAP Reconciliations 25 - 27 9
Slide 10: 9M 2018 Revenue & EBT
9M 2018 Revenue & EBT Revenue Revenue Earnings Before Tax $17.3 Billion $17.3 Billion $478 Million 92% 67% 55% 36% 6% 10% 2% 23% 9% Retail North America Retail Commercial Other* Automotive United Kingdom Truck Other *Includes equity income from joint venture investments, including Penske Truck Leasi
Slide 11: Retail Automotive
RETAIL AUTOMOTIVE PENSKE
Slide 12: World Wide Best in Class Brand Mix
World Wide Best in Class Brand Mix (% of Total Automotive Dealership Revenue) 9M 2018 6% 1% 13% 4% 22% 3% 10% Used Vehicle SuperCenters 6% 3% 1% 1% 9% 6% 9% 2% • Premium – 69% • Volume Non-U.S. – 23% • Used Vehicle SuperCenters – 6% • U.S. Big 3 – 2% 12
Slide 13: Stand-Alone Used Vehicle SuperCenters
STAND-ALONE USED VEHICLE SUPERCENTERS
Slide 14: Used Vehicle SuperCenters
Used Vehicle SuperCenters Q3 2018 Q3 2017 9M 9M Chg. Chg. Total Total 2018 2017 Used Units Retailed 18,568 11,626 +59.7% 56,073 30,952 +81.2% Same-Store 12,155 11,626 +4.6% --- --- --- Revenue (in millions) $329.7 $199.8 +65.0% $1,007.5 $535.7 +88.1% Same-Store $234.0 $199.8 +17.1% --- --- --- Avg.
Slide 15: Stand-Alone Supercenters Revenue & Gross
Stand-Alone Supercenters Revenue & Gross 9M YTD 2018 Revenue Gross Profit 2% 39% 84% 9% 6% 42% 17% 1% Used Wholesale S&P F&I 15
Slide 16: eCommerce
eCOMMERCE PENSKE
Slide 17: eCommerce
eCommerce • 35% of PAG’s U.S. vehicle sales attributed to internet/digital initiatives • Dealer sites, Penskecars.com; Preferred Purchase • Preferred Purchase through dealer websites and PenskeCars.com allows customers to choose how they prefer to buy/lease a vehicle • Conversion rate is 3x that of
Slide 18: North America Retail Commercial Truck Dealerships
NORTH AMERICA RETAIL COMMERCIAL TRUCK DEALERSHIPS
Slide 19: Premier Truck Group
Premier Truck Group Truck Sales Service Parts Body Shop • Over $1.3B of expected annual operating revenue • 3rd largest Dealership Group for Daimler Trucks N.A. • New and used retail sales; service and parts operations • 21 locations in Georgia, Oklahoma, Tennessee, Texas and Canada 19
Slide 20: Premier Truck Group Metrics
Premier Truck Group Metrics Total Same-Store Q3 ’18 Q3 ‘ 17 Chg Q3 ‘18 Q3 ‘ 17 Chg Units New Vehicles 2,431 1,757 +38.4% 2,393 1,757 +36.2% Used Vehicles 579 464 +24.8% 578 464 +24.6% Total 3,010 2,221 +35.5% 2,971 2,221 +33.8% Retail Revenue New Vehicles $249.4 $184.3 +35.3% $243.2 $184.3 +32.0% Us
Slide 21: Premier Truck Revenue & Gross
Premier Truck Revenue & Gross Q3 2018 Service & Parts Drives Profitability Revenue Gross Profit 8% 7% 24% 21% 65% 63% 5% 4% New Used S&P F&I Other 21
Slide 22: Penske Truck Leasing
PENSKE TRUCK LEASING PENSKE
Slide 23: Penske Truck Leasing Overview
Penske Truck Leasing Overview Full-Service Contract Truck Logistics Leasing Maintenance Rental Services • $14.4 billion total assets Revenue Logistics 24% • Annual revenue over $6.0 billion 50% 26% • Over 295,000 vehicles on the road Rental Lease & Maintenance 23
Slide 24: PTL Performance Summary
PTL Performance Summary Q3 Operating Revenue 13.3% 9M YTD Operating Revenue 14.0% ($ in Billions) ($ in Billions) $1.5 $1.7 $4.9 $1.4 $4.3 $3.9 Q3 '16 Q3 '17 Q3 '18 9M '16 9M '17 9M '18 Q3 Net Income 13.7% 9M YTD Net Income 10.8% ($ in Millions) ($ in Millions) $124 $124 $141 $317 $286 $280 Q3 '16 Q
Slide 25: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 26: EBITDA Reconciliation
EBITDA Reconciliation ($ in Millions) Q3 ’18 Q3 ’17 9M ’18 9M ‘17 Net Income $130.1 $94.3 $373.1 $284.2 Depreciation $25.9 $24.3 $77.2 $70.0 Other Interest $28.3 $27.8 $86.7 $79.2 Income Taxes $27.1 $44.7 $104.7 $136.0 (Income)/Loss from Disc. Ops. ($0.1) ($0.1) ($0.2) +$0.3 EBITDA $211.3 $191.0 $64
Slide 27: Income/EPS from Continuing Operations
Income/EPS from Continuing Operations ($ in Millions, except per share amounts) The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three months and nine months ended Se
Slide 28: Automotive
Automotive
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