Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (February 2020)
29 slides from Sonic Automotive's investor presentation, Feb 3, 2020
Slide 1: Sonic Automotive – A Holistic Approach to Creating Shareholder Value
Exhibit 99.1 Sonic Automotive – A Holistic Approach to Creating Shareholder Value
Slide 2: Forward-Looking Statements
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 bu
Slide 3: Company Overview
COMPANY OVERVIEW 3
Slide 4: Sonic Automotive: Who We Are
Sonic Automotive: Who We Are QUICK FACTS Collision Franchised and Repair EchoPark Stores Our Core Franchised 95 15 Centers Dealership Business Focuses on High Levels of New and Used Vehicle (NYSE: SAH) Sales Volume to Drive a Fortune 500 Profit From Parts and Service and Finance and Different Compan
Slide 5: Investment Highlights
Investment Highlights Multiple Growth And Profit Drivers For Franchised Operations Broad Geographic, Unique, High Return Revenue Stream And EchoPark Brand Mix Diversification Business Model Complementary Focused On SG&A Relationship – Sonic Control And Strengthening Franchises And EchoPark The Balan
Slide 6: Revenue Composition by Geography
Revenue Composition BY GEOGRAPHY Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space MD 3% SC 2% NV 2% VA 3% OH 3%* NC 3% GA 3% CA 28% CO 8% Concentration in Major Metro Markets AL 5% FL 6% TN 7% TX 27% Note: Percentages are Percent
Slide 7: Revenue Composition: Brand Distribution and Business Line Mix
Revenue Composition Brand Distribution Business Line Mix % of % of New Vehicle Brand Revenue Franchise Brand Revenue Used Vehicle (Including Wholesale) BMW 23% Mercedes 11% Parts, Service & Collision Audi 6% Finance & Insurance Lexus 4% Luxury 57% Land Rover 3% 14% Porsche 3% 10% Cadillac 3% 45% MIN
Slide 8: Franchised Operations
Franchised Operations Franchised Brands, Focus 86 Dealerships 20+ on Luxury New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) Major Collision Metropolitan 15 Repair Centers 20 Markets Focused On Inventory Mix and Attractive Pricing to Drive Growth and Profitability 8
Slide 9: Franchised Geographic Footprint
Franchised Geographic Footprint Headquartered in 86 Stores, 20+ Brands, Platforms in Major Charlotte, NC 15 Collision Repair Centers Metro Markets 9
Slide 10: Franchised Operations – Levers
Franchised Operations – Levers Parts and Service Acquire Potential High Return Stores F&I Penetration Divest Multiple Growth Underperforming Pre-Owned or Capital-Intensive Volume Stores Drivers Throughput Continued Expense Reductions Car Cash Omni-Channel Approach (Digital EchoPark One-Stop) Learnin
Slide 11: EchoPark Business Model
EchoPark Business Model The New Car Alternative™ Get the New Car Feel Without the New Car Price Focus On Pre-Owned Below Market Market – More Stable Pricing With Simplified, Easy Than New Vehicle Purchase Experience Market Unique, High Return Business Model 1- 4 Year Old 30% of Guests Vehicles - Nea
Slide 12: EchoPark Geographic Footprint
EchoPark Geographic Footprint Texas Colorado • Grand Prairie (Dallas) – • Thornton and Centennial driversselect Operation (Denver) – Opened Q4 2014 Acquired Q3 2017 • Colorado Springs – Opened • San Antonio – Opened Q4 Q2 2017 2017 • New Braunfels – Opened Q1 2018 • Houston – Opened December 2018 No
Slide 13: EchoPark Model: 4-Wall Economics
EchoPark Model: 4-Wall Economics Medium Store Large Store Existing Medium Stores: Average Selling Price $ 20,500 $ 20,500 • Centennial, CO Annual Revenues $ 184,500,000 $ 369,000,000 • Colorado Springs, CO Average Monthly Unit Volume - 100% Mature 750 1,500 • New Braunfels, TX Total Combined Front-E
Slide 14: EchoPark - Superior Unit Returns
EchoPark - Superior Unit Returns Ultra-Low Pricing Attractive F&I High Volume Throughput May Yield Slightly Negative Typical F&I Ranges From 5X Volume Per Store Per Month Front-End Gross Profit $2,200-$2,400 Per Unit vs. Sonic Franchised Stores Franchised Used EchoPark B (W) Front-End Used Vehicle G
Slide 15: Complementary Relationship
Complementary Relationship Franchised Operations • Thrives When New Vehicle Industry Is • Strong Secular Growth Phase Due To: Healthy, Particularly Where Luxury Brands Focus On Recession-Resistant Are Strong Pre-Owned Vehicle Market • Diverse Revenue Streams - Some Below-Market Price Strategy Re
Slide 16: Strategic Direction
Strategic Direction Franchised Capital EchoPark SG&A And Business Allocation Balance Sheet Drive New And Used Vehicle Early Stage Strong Secular Opportunistic Divestitures Of Relatively Low Fixed Cost Profit Growth Through Multiple Growth Phase Underperforming Or Capital- Structure Already In Place
Slide 17: Financial Overview
_ = RVIE ail FINANCIAL OVERVI Ww AUTOMOTIVE OMOTIVE AUTOMOTIVE
Slide 18: Q3 2019: Continuing Operations
Q3 2019: Continuing Operations Revenue Gross Profit Pre-Tax Profit (Loss) $312 $2.1 $186 $30 $14 InMillions ($5.5) $38.4 $2,391 $2,285 $346 $357 $28.1 Q3 18 Q3 19 Q3 18 Q3 19 Q3 18 Q3 19 Revenue Up 9.4% Gross Profit Up 7.3% Pre-Tax Up 57.5% Franchised EchoPark 18
Slide 19: Q3 2019: SG&A to Gross Profit
Q3 2019: SG&A to Gross Profit 350 bps Better 76.7% 80.2% 23.4% 21.7% 3.3% 4.1% 47.6% 48.6% 4.1% 4.1% Q3 2019 Q3 2018 Advertising Comp Rent Other Emphasis on Expense Control Note: Results reported for the third quarter of 2018 include pre-tax SG&A expenses totaling $3.1 million related to storm damag
Slide 20: Industry-Leading Used Vehicle Volume Throughput
Industry-Leading Used Vehicle Volume Throughput 550 Q3 2019 Used Vehicle Unit Sales Per Store Per Month 107 333 89 86 87 81 75 * Peer Average Is 84 Units Per Store Per Month – Sonic Franchised Volume Throughput Is 27% Higher Than Peer Average Note: CarMax Data is for the Quarter Ended August 31, 201
Slide 21: Used Vehicle Volume Throughput Over Time
Used Vehicle Volume Throughput Over Time Franchised Dealerships Average Used Volume Per Store Per Month 105 103 96 95 95 91 88 89 90 85 85 81 75 70 65 55 53 44 45 45 40 41 35 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* * YTD Q3 2019 21
Slide 22: EchoPark Retail Unit Sales Volume Growth
EchoPark Retail Unit Sales Volume Growth Revenue Units $350,000,000 13,206 14,000 12,587 $300,000,000 11,051 12,000 $250,000,000 10,000 8,762 7,698 $200,000,000 7,459 8,000 $150,000,000 5,518 6,000 4,496 $100,000,000 4,000 2,400 2,049 1,585 1,685 1,673 $50,000,000 1,136 2,000 660 881 920 764 941 212
Slide 23: Inventory Management Expertise
Inventory Management Expertise Q3 2019 Used Vehicle Inventory Days’ Supply 67 56 43 37 36 35 32 25 Low Inventory Days’ Supply Reduces Exposure to Fluctuations in Used Vehicle Valuations Note: CarMax Data is for the Quarter Ended August 31, 2019 23 23
Slide 24: Data and Analytics-Based Inventory Management
Data and Analytics-Based Inventory Management POWERFUL EFFICIENT INSTANT SIMPLE Analytics Delivered To Only the Information Needed Insights in Less Than a Click Implementation in Existing Buyer’s Fingertips in the Moment Webpage with No Training HyperIntelligence Embeds the Analytics Into the Tools
Slide 25: Vehicle Inventory Days' Supply Improving
Vehicle Inventory Days’ Supply Improving New Vehicle Days’ Supply 80 75 70 59 64 63 60 62 50 40 Excellent Used Vehicle Days’ Supply 33 30 30 32 30 29 31 34 27 27 25 20 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 New Used - Franchised Used - EchoPark 25
Slide 26: Consolidated F&I Per Unit Over Time
Consolidated F&I Per Unit Over Time F&I Gross Profit Per Unit 1,800 $1,721 1,700 1,600 $1,557 1,500 $1,411 1,400 $1,354 $ 1,300 $1,280 $1,219 1,200 $1,138 1,100 $1,071 $992 $1,002 $1,006 1,000 $954 $900 $906 $918 900 800 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* * Y
Slide 27: Capital Expenditure Discipline
Capital Expenditure Discipline Gross Capital Expenditures $234.2 $163.6 $128.0 FY 2017 FY 2018 FY 2019E Strict Capital Growth Capital Used To Expand Allocation Strategy EchoPark Locations Nationwide Allocate Capital Spend Where It Generates the Highest Returns 27
Slide 28: Strong Balance Sheet and Liquidity
Strong Balance Sheet and Liquidity September 30, 2019 December 31, 2018 (In thousands) Cash and cash equivalents $ $2,401 $ $5,854 Availability under the 2016 Revolving Credit Facility 202,060 223,922 Availability under our used vehicle floor plan facilities 7,905 1,979 Floor plan deposit balance 10
Slide 29: Investor Relations Contact
Investor Relations Contact: Sonic Automotive Inc. (NYSE: SAH) KCSA Strategic Communications Danny Wieland, Director of Financial Reporting David Hanover / Scott Eckstein ir@sonicautomotive.com sonic@kcsa.com (704) 927-3462 (212) 896-1220
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