Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Q1 2023 Earnings Presentation
27 slides from Group 1 Automotive's earnings presentation, Apr 26, 2023
Slide 1: First Quarter 2023 Financial Results
First Quarter 2023 Financial Results Investor Presentation April 26, 2023 Page 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our busi
Slide 3: Why Group 1?
Why Group 1? CONSISTENT FLEXIBLE PARTS & SERVICE GEOGRAPHIC DIGITAL PROFITABILITY & CAPITAL ALLOCATION GROWTH OUTPERFORMANCE DIVERSIFICATION INNOVATION STRONG CASH FLOW Diversified our U.S. footprint with AcceleRide®, our state-of-the-art Group 1 has NEVER lost Balanced M&A, share Consiste
Slide 4: Geographic Footprint
Geographic Footprint Maine (6) New Hampshire (4) United States 17 States Boston Metro (19) NYC Metro (4) 148 Dealerships Philadelphia (1) 78% of New Vehicle Unit Sales* Atlantic City (2) Annapolis (2) Sacramento (2) Kansas City (3) Charlotte (1) Los Angeles (3) Santa Fe (3) Columbia (1) Amarillo (1)
Slide 5: Texas Facts: #1 in Economic Opportunity
Group 1 is the Texas Facts: #1 in Economic Opportunity #1 auto retailer in Texas Group 1 will continue to benefit from Texas’s sustained economic growth 36% of GPI’s 1Q23 NV unit sales Texas continues to be the fastest growing state BEST STATE FOR BUSINESS in the U.S.1 by Chief Executive Magazine Te
Slide 6: Traditional Business Mix
Traditional Business Mix Parts & Service is the heart of Revenue* Gross Profit* Group 1’s business model and generates ~45% of total gross 4% profit. 1Q23 Fixed Absorption ~ 110%** 13% 27% Finance & Insurance Parts & Service has traditionally 31% only declined around mid-single Parts & Service digit
Slide 7: Total Consolidated New Vehicle Brand Mix 1Q23
Total Consolidated New Vehicle Brand Mix 1Q23 The Company’s brand diversity allows it to reduce the risk of evolving consumer preferences. 18% Revenue Mix Unit Mix 21% 19% 34% 44% 12% 37% 45% 9% 8% Import Luxury Domestic Import Luxury Domestic 7% 7% 6% 5% 5% 4% 4% 4% 3% 3% 2% 2% <1% Other *Based on
Slide 8: Transformational Growth Strategy
Transformational Growth Strategy First priority for capital allocation is growing the company through acquisitions $3.6B in acquired revenues since the beginning of 2021 Capital Repurchased ~4.2 million common shares over the past 18 months ended March 31, 2023, representing 23% Allocation of
Slide 9: Balanced Capital Allocation 2023 YTD
Balanced Capital Allocation 2016 2017 2018 2019-20 2021 2022 2023 YTD Acquisitions: Acquisitions: Acquisitions: Acquisitions: Acquisitions: Acquisitions: Acquisitions: $660M $490M $615M $430M $2.5B $940M $150M (21 franchises) (20 franchises) (17 franchises) (15 franchises) (58 franchises) (11 franch
Slide 10: Debt & Interest Rate Exposure
~70% fixed rate debt Debt & Interest Rate Exposure including floorplan At 03/31/23, Group 1’s total debt including floorplan was $3.1B: Debt Maturities excludes floorplan ~$1,150 million of floorplan debt $1,000M ~$750 million of mortgage debt $750M ~$750 million of bond debt ~$250 million of acquis
Slide 11: Parts & Service Overview
1Q23 U.S. SS P&S Sales Parts & Service Overview +13.1%YoY Stability of free cash flow through economic cycles. Service-to Service Retention by Model Year(1) Above sector-average growth through our strategic emphasis on customer service 67% 79% 76% 72% 71% 69% 67% 65% 62% 60% 54% 68% Attractive benef
Slide 12: Battery Electric Vehicle Parts and Service Outlook
Battery Electric Vehicle (“BEV”) Parts and Service Outlook Our dealerships are equipped to service all powertrain types According to Edmunds.com as of January 2023, the 5-year repair and maintenance cost of ownership of a 2022 Audi e-tron EV is $8,584 versus $8,440 for a 2022 Audi Q5 ICE -- an immat
Slide 13: AcceleRide Digital Platform Summary
AcceleRide drives customer AcceleRide Digital Platform Summary loyalty, retention, and employee efficiencies Buy A Ride Sell A Ride Inventory selection of new, used, and CPO provides identical user experience Instant cash offer All credit applications are digital and Offer valid for 7 days or 250 mi
Slide 14: AcceleRide Growth Profile
In March 2023 ~80% of vehicle sales utilized at least 1 AcceleRide Growth Profile component of the AcceleRide platform Customer Leads Trend Penetration Trend 50K 22.0% 45K Significant growth in 20.0% Significant growth in % 40K # of customer leads 18.0% of sales originating 35K 16.0% originating thr
Slide 15: AcceleRide Reach & Retention
AcceleRide allows us to reach more customers and drives AcceleRide Reach & Retention loyalty after the sale Online Service Appointments Improved Customer Retention 45% Easy online appointment Not AcceleRide AcceleRide 40% -making Our customer 35% capabilities retention metrics are result in 74% ~10%
Slide 16: Used Vehicle Overview
GPI Outperforms the Used Vehicle Industry Used Vehicle Overview FY22 GPI U.S. Same Store Unit Sales: Flat YoY FY22 U.S. Used Market Unit Sales: -10% YoY Total Used Vehicle U.S. Used Market Size1 41 U.S. Market Share2 Revenues ($MM)* (MM) Annual Used Vehicle Units 40 40 +11.6% 2016-2022 39 39 29% CAG
Slide 17: Finance & Insurance Overview
1Q23 U.S. Same Store F&I GP PRU: Finance & Insurance Overview -7.7% YoY Improved F&I profitability via U.S. F&I Gross Profit $2,428 focus on compliance & growth $2,260 Per Retail Unit includes: (PRU) $2,155 $1,951 $1,782 Consolidation of lender base $1,710 $1,647 $1,599 Integration of compliance, tr
Slide 18: Real Estate Strategy
Real Estate Strategy Dealership Property Breakdown by Region Owned vs. Leased Property Trend (as of March 31, 2023) 157 169 202 204 # Properties Dealerships Region Owned Leased 43% 38% 36% 35% % L eased United States 108 41 United Kingdom 25 30 Total 133 71 65% 57% 62% 64% % Owned 2017 2019 2021 1Q2
Slide 19: ESG and DEI Highlights
ESG and DEI Highlights Group 1 is rated as low ESG risk and ranked in the top 10th percentile out of ~15,000 companies covered by Sustainalytics Group1Auto.com – Investor Presentation Page 19
Slide 20: Group 1's Leadership Team
Group 1's Leadership Team Joined GP1 April 2007 Daryl Kenningham Joined GP1 July 2011 Mike Jones 40+ Years Industry Experience 35+ Years Industry Experience President, CEO and Director SVP, Aftersales Automotive-related Experience Manufacturer and Automotive Retailing Experience DanielMcHenry Joined
Slide 21: Group 1's Core Values
Group 1’s Core Values Integrity Transparency Professionalism Teamwork Respect We conduct ourselves We promote open and We set our standards We put the interest of We treat everyone, with the highest level of honest communication high so that we can the group first, before customers and ethics both p
Slide 22: Conclusion
Conclusion Completion of $3.6B in acquired revenues since the State-of-the-Art digital retailing platform has beginning of 2021 and strategic divestiture of Brazil grown significantly and allows for a much lower in July 2022 cost structure as it gains scale Flexible & balanced capital allocati
Slide 23: Appendix & Non-GAAP Reconciliations
Appendix & Non- GAAP Reconciliations Page 23
Slide 24: Non-GAAP Financial Measures, Same Store Data, and Other Data
Non-GAAP Financial Measures, Same Store Data, and Other Data In addition to evaluating the financial condition and results of our operations in accordance with U.S. GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions
Slide 25: Reconciliation: Adjusted Cash Flow (Non-GAAP)
Reconciliation: Adjusted Cash Flow (Non-GAAP) (unaudited, $MM) 2016 2017 2018 2019 2020 2021 2022 1Q23 Operating Cash Flow (GAAP) $ 384 $ 197 $ 270 $ 371 $ 805 $ 1,260 $ 586 $ 143 Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset account and net acquisitions
Slide 26: Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP) Reconciliation of Total Diluted Earnings per Share (EPS) (unaudited, $MM) 2016 2017 2018 2019 2020 2021 2022 1Q23 As Reported EPS $ 6.67 $ 10.08 $ 7.83 $ 9.34 $ 15.51 $ 30.11 $ 47.14 $ 11.10 After Tax Adjustments: Non-cash asset impairment
Slide 27: group1auto.com
group1auto.com Page 27