Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q4 2023 Earnings Presentation
38 slides from Sonic Automotive's earnings presentation, Feb 14, 2024
Slide 1: Sonic Automotive Investor Presentation Fourth Quarter 2023
Sonic Automotive Investor Presentation Fourth Quarter 2023 Updated February 14, 2024
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 (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers 139 35+ 20 16 $14.4 Billion $2.2 Billion 112K New Vehicles Sold 176K Total Revenues Brands Locations Used Vehicles Sold Collision Centers States Gross Profit Note: Loca
Slide 5: Investment Highlights
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Dealerships Segment Unique, High Return Potential EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship Between Operating Segments Disciplined Capital Allocation To Drive Shareholder Returns F
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 27% CA 23% CO 9% TN 7% FL 5% AL 5% NC 5% GA 4% ID 3% VA 2% MD 2% NV 2% All Others 6% Broad Geographic Distribution Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Perce
Slide 7: Revenue Composition – Diversified Revenue Streams
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for the Year Ended December 31, 2023 5% 30% 12% 39% 38% 7% 45% 24% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance
Slide 8: EchoPark Automotive – A Unique Growth Story
8 ® EchoPark Automotive – A Unique Growth Story Planned Nationwide Distribution Network At Maturity Unique, High Return Potential Business Model Focus On High Quality Pre-Owned Vehicles, In-Store or Online Plan To Reach 90% Of U.S. Population At Maturity Priced Up To $3,000 Below Market With Simplif
Slide 9: Strategic Focus
9 Strategic Focus • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Pursue Strategic Acquisition Opportunities As Market Evolves • Utilize Existing Infrastructure To Support Omnichannel Distributio
Slide 10: Strong Balance Sheet And Liquidity
10 December 31, 2023 September 30, 2023 December 31, 2022 (In Millions) Cash and cash equivalents 28.9$ 34.6$ 229.2$ Floor plan deposit balance 345.0 300.0 272.0 Availability under the 2021 Revolving Credit Facility 298.6 288.9 292.9 Availability under the 2019 Mortgage Facility 173.0 173.0 - Total
Slide 11: Share Repurchase Update
11 Share Repurchase Update ($ in Millions) Share Repurchase Authorization Remaining at December 31, 2022 464.3$ Q1 2023 Repurchase Activity (90.7) Q2 2023 Repurchase Activity - Q3 2023 Repurchase Activity (86.8) Q4 2023 Repurchase Activity (0.1) Remaining Authorization 286.7$ 43.1 41.8 40.7 36.2 34.
Slide 12: FY 2024 Outlook
12 FY 2024 Outlook • Expect Continued Return Of New Vehicle Inventory To Drive Further Normalization Of New Vehicle GPU • New Vehicle Inventory Days’ Supply Could Exceed 50 Days (Adjusted For Sonic Brand Mix) • New Vehicle GPU Could Exit 2024 Near $3,000 Per Unit (Adjusted For Sonic Brand Mix) • Ind
Slide 13: FY 2024 Outlook
13 FY 2024 Outlook • Expect Low Single Digit Percentage Growth In Revenues And Mid Single Digit Percentage Decline In Gross Profit, Driven By: • Continued Normalization Of New Vehicle GPU, Potentially Exiting 2024 In $3,000 Per Unit Range • Low Single Digit Percentage Growth In New And Used Retail S
Slide 14: Franchised Dealerships
14 Franchised Dealerships
Slide 15: Franchised Dealerships
15 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships108 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts & Service (Fixed Ops) • Finance & Insurance (F&I) Collision Repair Centers16 18 Sta
Slide 16: Franchised Dealerships – Geographic Footprint
16 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 108 Stores, 25+ Brands, 16 Collision Repair Centers
Slide 17: EchoPark
17 EchoPark
Slide 18: EchoPark – Brand Promise
18 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality Pre-Owned Vehicles With Available Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Ev
Slide 19: Buy & Sell Your Way
19 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 20: EchoPark – Planned Nationwide Distribution Network
20 EchoPark – Planned Nationwide Distribution Network Target 90% Population Coverage At Maturity Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” Suspended Operations Expected Coverage Area Existing Retail Hub
Slide 21: EchoPark – Addressable Market Opportunity
21 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit Core1-4-Year-Old Model In Existing EchoPark Markets Plan To Achieve 90% Population Coverage At Maturity Once Market Conditions Improve Target 10% Market Share Already Achieving This Share* In Most Mature Market Priced Up to $3
Slide 22: EchoPark Segment – Revenue & Unit Volume Trend
22 EchoPark Segment – Revenue & Unit Volume Trend 15,347 17,871 15,000 16,773 15,32611,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 19,670 21,261 21,255 15,649 14,931 16,496 15,245 17,435 19,980 17,084 19,050 17,562 - 5,000 10,000 15,000 20,000 25,000 $- $100 $200 $300 $400 $500 $600 $700 (U
Slide 23: EchoPark Segment – Adjusted EBITDA Trend
23 EchoPark Segment – Adjusted EBITDA Trend $4.9 $4.9 $6.4 $5.3 $5.2 $5.6 $3.2 ($3.6) $5.3 ($10.9) ($30.5) ($19.2) ($36.2) ($30.8) ($23.7) ($24.1) ($24.4) ($27.3) ($3.5) ($6.7) $0.7 $0.9 $1.5 $2.0 $4.6 $6.7 $3.4 $0.5 $(1.3) $(12.5) $(4.5) $(1.7) $(2.4) $(40) $(30) $(20) $(10) $- $10 Q 1 2019 Q 2 201
Slide 24: Powersports
24 Powersports
Slide 25: Powersports – Opportunistic Growth
25 Powersports – Opportunistic Growth • Growth Via Acquisition At Attractive Earnings Multiples • Consolidation Opportunity In A $34 Billion Market* Where 85% Of U.S. Dealers Own A Single Location • Drive Profitability Enhancement Through Technology And Process Development • Generate Higher Margins
Slide 26: Appendix
26 Appendix
Slide 27: GAAP Income Statement Annual Trend – Consolidated
27 GAAP Income Statement Annual Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts FY 2023 Better / (Worse) % Change (In millions, except unit, per unit, and per share data) FY 2023 FY 2022 FY 202
Slide 28: Non-GAAP Reconciliation – Annual Trend – Consolidated
28 Non-GAAP Reconciliation – Annual Trend – Consolidated NM = Not Meaningful Note: Earnings (Loss) Per Share and SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Note: Balance Sheet Amounts Are As Of December 31 For The FY Then Ended, Balance She
Slide 29: GAAP Income Statement Quarterly Trend – Consolidated
29 GAAP Income Statement Quarterly Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions, except unit, per unit, and per share data) Q4 2023 Q3 2023 Q2
Slide 30: Non-GAAP Reconciliation – Quarterly Trend – Consolidated
30 Non-GAAP Reconciliation – Quarterly Trend – Consolidated NM = Not MeaningfulNote: Earnings (Loss) Per Share and SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions, except per share data) Q4 2023 Q3
Slide 31: GAAP Income Statement – Quarterly Trend – Franchised Dealerships Segment
31 GAAP Income Statement – Quarterly Trend – Franchised Dealerships Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 S
Slide 32: Non-GAAP Reconciliation – Quarterly Trend – Franchised Dealerships Segment
32 Non-GAAP Reconciliation – Quarterly Trend – Franchised Dealerships Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Sequen
Slide 33: GAAP Income Statement – Quarterly Trend – EchoPark Segment
33 GAAP Income Statement – Quarterly Trend – EchoPark Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Sequential Year
Slide 34: Non-GAAP Reconciliation – Quarterly Trend – EchoPark Segment
34 Non-GAAP Reconciliation – Quarterly Trend – EchoPark Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Sequential Year-Over
Slide 35: GAAP Income Statement – Quarterly Trend – Powersports Segment
35 GAAP Income Statement – Quarterly Trend – Powersports Segment NM = Not MeaningfulNote: Gross Profit Per Unit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions, except unit and per unit data) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Sequential Y
Slide 36: Non-GAAP Reconciliation – Quarterly Trend – Powersports Segment
36 Non-GAAP Reconciliation – Quarterly Trend – Powersports Segment NM = Not MeaningfulNote: SG&A Expenses As A Percentage Of Gross Profit Metrics Are Calculated Based On Actual Unrounded Amounts Q4 2023 Better / (Worse) % Change (In millions) Q4 2023 Q3 2023 Q2 2023 Q1 2023 Q4 2022 Sequential Year-O
Slide 37: Non-GAAP Reconciliation – Adjusted EBITDA – EchoPark Segment
37 Non-GAAP Reconciliation – Adjusted EBITDA – EchoPark Segment (In millions) Q1 2019 Q2 2019 Q3 2019 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Income (loss) before taxes 0.2$ 1.7$ 2.1$ (14.5)$ 2.1$ 2.6$ 0.2$ (0.8)$ 2.0$ (14.4)$ Non-floor plan interest 0.5 0.4 0.5 0.4 0.4 0.2 0.1 0.2 0
Slide 38: Investor Relations Contact
® Investor Relations Contact: Danny Wieland, Vice President, Investor Relations & Financial Reporting Sonic Automotive Inc. (NYSE: SAH) Email: ir@sonicautomotive.com Investor Relations Website: ir.sonicautomotive.com