Sonic Automotive, Inc. · NYSE:SAH

Sonic Automotive — Investor Presentation (February 2022)

46 slides from Sonic Automotive's investor presentation, Feb 16, 2022

  1. Slide 1: Sonic Automotive – Investor Presentation February 2022

    ® Sonic Automotive – Investor Presentation February 2022 Updated February 16, 2022

  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

  3. Slide 3: Company Overview

    3 Company Overview

  4. 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 157 25+ 23 17 $12.4 Billion $1.9 Billion 103K New Vehicles Sold 183K Total Revenues Automotive Brands Locations Used Vehicles Sold Collision Centers States Gross Profit

  5. 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

  6. Slide 6: Revenue Composition by Geography

    6 Revenue Composition BY GEOGRAPHY TX 28% CA 24% CO 9% TN 8% FL 7% AL 5% GA 4% NC 4% MD 2% SC 2% VA 2% NV 2% All Others 3% Broad Geographic Distribution Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Perce

  7. Slide 7: Revenue Composition – Diversified Revenue Streams

    7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2021 5% 33% 11% 35% 42% 7% 42% 25% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distributi

  8. Slide 8: EchoPark Automotive – A Unique Growth Story

    8 ® EchoPark Automotive – A Unique Growth Story Growing Nationwide Distribution Network Expected To Reach 90% Of Population By 2025 Unique, High Return Business Model Focus On High Quality 1 to 4-Year-Old Nearly New Vehicles Wide Reach – 30% of Guests Travel More Than 30 Minutes To Shop Our Inventor

  9. Slide 9: Franchised Dealerships and EchoPark: Complementary Relationship Between Segments

    9 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diversified Revenue Streams • Relatively Low Fixed Costs And Multiple Strategic Levers • Further Growth Opportunities:  Parts And Se

  10. Slide 10: Strategic Direction

    10 Strategic Direction • 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 Distri

  11. Slide 11: Focus On Strong Balance Sheet And Liquidity

    11 Focus On Strong Balance Sheet And Liquidity December 31, 2021 December 31,2020 (In Millions) Cash and cash equivalents 299.4$ 170.3$ Availability under the 2021 Revolving Credit Facility(1) 281.4 214.7 Availability under the 2019 Mortgage Facility 22.2 11.2 Availability under the 2020 Line Of Cre

  12. Slide 12: EchoPark

    12 EchoPark

  13. Slide 13: EchoPark – Brand Promise

    13 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To $3,000 Below Used Vehicle Market Price High Quality, Low Mileage Vehicles Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Free CARFAX Report With Every Vehicle Buy & Sel

  14. Slide 14: EchoPark – Developing Nationwide Distribution Network

    14 EchoPark – Developing Nationwide Distribution Network Over 30% Population Coverage At End Of 2021 Target 90% Population Coverage By 2025 Note: Future locations and U.S. population coverage are based on projections. Actual results may differ. See “Forward-Looking Statements.” * Northwest Motorspor

  15. Slide 15: EchoPark – Addressable Market Opportunity

    15 EchoPark – Addressable Market Opportunity * Share Of Vehicles That Fit Model In Existing EchoPark Markets Target 90% Population Coverage By 2025 With Growing Nationwide Distribution Network Target 10% Market Share Already Achieving This Share* In Multiple Markets Priced Up to $3,000 Below Used Co

  16. Slide 16: EchoPark – Growth Forecast

    16 EchoPark – Growth Forecast 77,835 575,000 FY 2021 FY 2025E Retail Unit Sales Volume FY 2021 FY 2025E $2.3 $14.0 Total Revenues (In Billions) 56% CAGR $(65.6) $220.0 FY 2021* FY 2025E Pre-Tax Profit (Loss) (In Millions) $(46.3) $260.0 FY 2021* FY 2025E EBITDA (In Millions) Growth Drivers • Reached

  17. Slide 17: EchoPark – Modeled 4-Wall Economics At Maturity

    17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery 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$ 410,000,0

  18. Slide 18: EchoPark – Delivery Center Model

    18 EchoPark – Delivery Center Model Existing Retail Hub Example Delivery Center Market Coverage Opportunity Delivery Center Model • Utilize Nearby Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory Online In Surrounding Markets • Drive Incremental eComm

  19. Slide 19: EchoPark – High Volume Model Drives Superior Returns

    19 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark Better / (Worse) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,800 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,600 $2,150 ($1,450) Volume Differential

  20. 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 19,670 21,261 21,255 15,649 $- $100 $200 $300 $400 $500 $600 $700 (In M illi on s) Quarterly Used Retail Units Quarterly Revenue

  21. Slide 21: EchoPark – Adjusted EBITDA Trend

    21 EchoPark – Adjusted EBITDA Trend ($2.8) ($1.1) ($3.4) ($2.2) ($3.0) ($2.1) $5.0 $4.8 $6.4 $5.3 $5.2 $5.6 $3.1 ($2.9) $6.2 ($9.4) ($28.5) ($14.6) $6.1 $6.2 $6.8 $4.8 $(0.3) $6.7 $(4.0) $(11.7) $(6.1) $(30) $(25) $(20) $(15) $(10) $(5) $- $5 $10 Adjusted EBITDA Less Impact of New Stores (In M illi

  22. Slide 22: Franchised Dealerships

    22 Franchised Dealerships

  23. Slide 23: Franchised Dealerships

    23 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships111 Brands, Luxury Weighted25+ Diversified Revenue Streams • New & Used Vehicle Sales • Parts Service (P S) • Finance & Insurance (F&I) Collision Repair Centers17 17 States Stab

  24. Slide 24: Franchised Dealerships – Geographic Footprint

    24 Franchised Dealerships – Geographic Footprint Diversified Geographic Market Platform 111 Stores, 25+ Brands, 17 Collision Repair Centers RFJ Auto Acquisition Closed In December 2021 • 22 Franchised Locations In 6 States, 16 New Vehicle Brands • Added 5 New States, 5 New Brands To Portfolio

  25. Slide 25: Franchised Dealerships – Strategic Growth Levers

    25 Franchised Dealerships – Strategic Growth Levers Multiple Growth Drivers Pursue Strategic Acquisitions Opportunities Grow Parts and Service Retention Maximize F&I Penetration High Used Vehicle Volume Throughput Data-Driven Inventory Management Apply EchoPark Learnings Develop Omnichannel Platform

  26. Slide 26: Omnichannel Strategy

    26 Omnichannel Strategy

  27. Slide 27: Full Omnichannel Infrastructure

    27 Full Omnichannel 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

  28. Slide 28: Buy & Sell Your Way

    28 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

  29. Slide 29: Appendix

    29 Appendix

  30. Slide 30: Non-GAAP Reconciliation – Segment Income (Q4)

    30 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q4 2021 Q4 2020 Q4 2021 Q4 2020 Q4 2021 Q4 2020 Revenues 2,605.4$ 2,411.7$ 579.2$ 386.9$ 3,184.6$ 2,798.6$ Gross profit 489.7$ 363.0$ 40.9$ 26.1$ 530.6$ 389.1$ SG&

  31. Slide 31: Non-GAAP Reconciliation – Segment Income (FY)

    31 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) FY 2021 FY 2020 FY 2021 FY 2020 FY 2021 FY 2020 Revenues 10,051.1$ 8,348.0$ 2,345.3$ 1,419.0$ 12,396.4$ 9,767.0$ Gross profit 1,765.6$ 1,309.4$ 148.8$ 114.0$ 1,914

  32. Slide 32: Non-GAAP Reconciliation – Consolidated SG&A Expenses

    32 Non-GAAP Reconciliation – Consolidated SG&A Expenses Q4 2021 Q4 2020 Change % Change FY 2021 FY 2020 Change % Change (In millions) (In millions) Reported: Compensation 226.0$ 176.1$ $ (49.9) (28.3)% 834.5$ 659.8$ $ (174.7) (26.5)% Advertising 17.4 10.5 (6.9) (65.7)% 61.6 42.2 (19.4) (46.0)% Rent

  33. Slide 33: Non-GAAP Reconciliation – Franchised SG&A Expenses

    33 Non-GAAP Reconciliation – Franchised SG&A Expenses Q4 2021 Q4 2020 Change % Change FY 2021 FY 2020 Change % Change (In millions) (In millions) Reported: Compensation 189.8$ 160.0$ $ (29.8) (18.6)% 719.6$ 598.3$ $ (121.3) (20.3)% Advertising 6.3 6.0 (0.3) (5.0)% 26.1 30.1 4.0 13.3 % Rent 10.4 12.2

  34. Slide 34: Non-GAAP Reconciliation – EchoPark SG&A Expenses

    34 Non-GAAP Reconciliation – EchoPark SG&A Expenses Q4 2021 Q4 2020 Change % Change FY 2021 FY 2020 Change % Change (In millions) (In millions) Reported: Compensation 36.2$ 16.1$ $ (20.1) (124.8)% 114.9$ 61.5$ $ (53.4) (86.8)% Advertising 11.1 4.5 (6.6) (146.7)% 35.5 12.1 (23.4) (193.4)% Rent 1.7 1.

  35. Slide 35: Non-GAAP Reconciliation – Earnings Per Share (Q4)

    35 Non-GAAP Reconciliation – Earnings Per Share Q4 2021 Q4 2020 (In millions, 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 42.8 96.3$ 2.25$ 44.0 57.5$ 1.31$ Pr

  36. Slide 36: Non-GAAP Reconciliation – Earnings Per Share (FY)

    36 Non-GAAP Reconciliation – Earnings Per Share FY 2021 FY 2020 (In millions, 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) 43.3 348.9$ 8.06$ 42.5 (50.7)$ (1

  37. Slide 37: Non-GAAP Reconciliation – Adjusted EBITDA

    37 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 for the FY Then Ended. (In millions) FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Net Income (Loss) 93.0$ 51.7$ 144.1$ (51.4)$ 348.9$ Provision For Income Taxes 13.2 22.6 55.0 15.6 109.3 Income (Loss) Before T

  38. Slide 38: Non-GAAP Reconciliation – Adjusted EBITDA

    38 Non-GAAP Reconciliation – Adjusted EBITDA Note – Balance Sheet Amounts Are As Of December 31 for the FY Then Ended. Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In million

  39. Slide 39: Non-GAAP Reconciliation – Adjusted EBITDA

    39 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 113.8 $ 30.8 Provision For Income Taxes 37.0 6.3 In

  40. Slide 40: Non-GAAP Reconciliation – Adjusted EBITDA

    40 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 57.3 $ 46.3 Provision For Income Taxes 32.8 14.7 In

  41. Slide 41: Non-GAAP Reconciliation – Adjusted EBITDA

    41 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 30.8 $ 26.6 Provision For Income Taxes 6.3 10.0 Inc

  42. Slide 42: Non-GAAP Reconciliation – Adjusted EBITDA

    42 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 46.3 $ 21.8 Provision For Income Taxes 14.7 9.2 Inc

  43. Slide 43: Non-GAAP Reconciliation – Adjusted EBITDA

    43 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 42.2 $ (2.2) Provision For Income Taxes 19.0 (1.9)

  44. Slide 44: Non-GAAP Reconciliation – Adjusted EBITDA

    44 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In millions) (In millions) Net Income (Loss) $ 21.8 $ 62.0 Provision For Income Taxes 9.2 (8.4) In

  45. Slide 45: ® ®

    ® ®

  46. Slide 46: 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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