Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q1 2022 Earnings Presentation
39 slides from Penske Automotive's earnings presentation, Apr 27, 2022
Slide 1: First Quarter 2022 Financial Results
First Quarter 2022 Financial Results
Slide 2: Disclaimer
DISCLAIMER Statements in this press release may involve forward-looking statements, including forward- looking statements regarding Penske Automotive Group, Inc.’s financial performance, acquisitions, and growth plans. Actual results may vary materially because of risks and uncertainties that are di
Slide 3: Overview, Highlights, Performance Review, Digital Marketing/Retailing, Non-GAAP
Overview Highlights Performance Review Digital Marketing/Retailing Non-GAAP
Slide 4: Overview
OVERVIEW Operations across four continents and nine countries Retail Automotive U.S., U.K., Germany, Italy, Spain, and Japan Used Vehicle SuperCenters U.S. and U.K. Commercial Trucks U.S. and Canada Commercial Vehicles, Power Systems & Parts Distribution Australia and New Zealand P
Slide 5: About Penske Automotive
ABOUT PENSKE AUTOMOTIVE A $26 BILLION DIVERSIFIED INTERNATIONAL TRANSPORTATION SERVICES COMPANY AND ONE OF THE WORLD’S PREMIER AUTOMOTIVE AND COMMERCIAL TRUCK RETAILERS Deliver excellence to our customers, value to our stakeholders, and opportunity MISSION to our team members everywhere we operate o
Slide 6: Highlights
Overview Highlights Performance Review Digital Marketing/Retailing Non-GAAP
Slide 7: Investment Highlights
INVESTMENT HIGHLIGHTS Diversified business mix provides multiple opportunities for growth Operate in the highly fragmented automotive and commercial truck retail industries Retail automotive segment focused on Premium/Luxury brands which generate more than 70% of automotive revenue One of th
Slide 8: Q1 2022 Highlights
Q1 2022 HIGHLIGHTS ($ in Millions, except Per Share Amount) Q1 ’22 Q1 ’21 Chg Revenue $6,975 $5,774 +21% Same-Store Revenue $6,578 $5,760 +14% Income from Cont. Ops Before Taxes $498 $248 +101% Income from Cont. Ops $368 $183 +102% Earnings Per Share $4.76 $2.26 +111% 8
Slide 9: Q1 2022 Key Takeaways
Q1 2022 KEY TAKEAWAYS Retail Automotive Commercial Trucks Capital Allocation Retailed 113,759 new & used units, Retailed 4,692 new & used trucks, Completed acquisitions representing +2.6% +56.1%; same-store units +25.9% approx. $665 million YTD (April 2022) in Same-store revenue +11.4% Sam
Slide 10: EBT Return on Sales
EBT RETURN ON SALES Commercial Trucks Retail Automotive Commercial Penske Automotive & Power Systems (incl. CarShop) Trucks (N. A.) Group (Aus/NZ) Q1 2022 5.1% 7.4% 7.0% 7.1% Q1 2021 3.1% 6.3% 4.6% 4.3% Q1 2020 0.9% 2.8% 2.9% 1.4% Q1 2019 1.7% 4.8% 5.1% 2.4% 10
Slide 11: Q1 2022 Revenue & EBT
Q1 2022 REVENUE & EBT Revenue Revenue Earnings Before Tax $7.0 Billion $7.0 Billion $498 Million 12% 32% 12% 2% 59% 86% 2% 62% 24% 9% North America Retail Retail Automotive Commercial Truck United Kingdom Comm. Vehicles & Other* Other Power Systems Dist. (Australia) *Other consists of non-automotive
Slide 12: SG&A to Gross Profit
SG&A TO GROSS PROFIT EXPENSE LEVERAGE IMPROVEMENT OF 1,780 BPS 82.6% 72.7% 64.8% Q1 '20 Q1 '21 Q1 '22 12
Slide 13: Long Term Debt and Leverage
LONG TERM DEBT AND LEVERAGE 4 $2,500 $2,360 $2,163 $2,217 $2,000 3 2.9x $1,690 2.7x 2.9x $1,500 $1,474 $1,463 2 $1,000 1.8x 1 $500 0.8x 0.7x 0 $0 2017 2018 2019 2020 2021 Q1 2022 -$500 -1 Debt Leverage Refer to non-gaap reconciliation schedule on pages 36, 37 and 38 13
Slide 14: Performance Review
Overview Highlights Performance Review Digital Marketing/Retailing Non-GAAP
Slide 15: Retail Automotive Revenue
RETAIL AUTOMOTIVE REVENUE Diversified Revenue Stream Drives Profitability 1% 6% 3% New 10% 21% 30% Used 41% GROSS REVENUE S&P PROFIT F&I 15% 40% 33% F&WH 15
Slide 16: Retail Automotive Brand Mix
RETAIL AUTOMOTIVE BRAND MIX (YTD 2022) (% of Total Worldwide Automotive Dealership Revenue) Premium – 70% U.S. – 1% 25% Volume Non-U.S. – 20% CarShop – 9% 11% 11% 10% 9% 7% 7% 6% 4% 3% 3% 1% 1% 1% 1% Other 16
Slide 17: Retail Automotive Key Metrics
RETAIL AUTOMOTIVE KEY METRICS Same-Store Q1 ‘22 Q1 ’21 Chg Volume Metrics New Units (U.S. -13%; U.K. -13%) 43,804 50,322 -13% Used Units (U.S. -9%; U.K. +33%) 65,414 60,347 +8% Total Units 109,218 110,669 -1% Gross Per Unit New $6,770 $4,063 +67% Used $2,300 $1,810 +27% F&I $1,932 $1,521 +27% Variab
Slide 18: Retail Automotive Same-Store Revenue
RETAIL AUTOMOTIVE SAME-STORE REVENUE Q1 ’22 Q1 ’21 Chg New Vehicle $2,342 $2,415 -3% Used Vehicle $2,333 $1,804 +29% F&I $ 211 $ 168 +26% Service & Parts $ 567 $ 502 +13% Fleet & Wholesale $ 333 $ 305 +9% Total $5,786 $5,194 +11% 18
Slide 19: CarShop
CARSHOP Operate stand-alone used vehicle centers across U.S./U.K. One price; no haggle approach In-store or 100% on-line TOTAL SAME-STORE Q1 ’22 Q1 ’21 Chg Q1 ’22 Q1 ’21 Chg Units 19,523 11,395 +71% 17,543 11,395 +54% Revenue $516 $243 +113% $459 $243 +89% Avg Trans $21,700 $17,657 +23% $21,46
Slide 20: Premier Truck Group
PREMIER TRUCK GROUP One of the largest dealership groups for Daimler Trucks N.A. Retails new and used Freightliner and Western Star Trucks 41 locations across North America Service and parts gross profit provides 59% of total gross profit 7.4% return on sales Q1 fixed cost absorption 130
Slide 21: Retail Commercial Truck Key Metrics
RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q1 ’22 Q1 ’21 Chg Volume Metrics New Units 3,134 2,165 +45% Used Units 651 841 -23% Gross Per Unit New Vehicle $ 7,784 $6,585 +18% Used Vehicle $19,263 $7,674 +151% F&I $ 1,452 $1,047 +39% 21
Slide 22: PTG Performance Summary
PTG PERFORMANCE SUMMARY Revenue Earnings Before Taxes ($ in Millions) ($ in Millions) $792 $59 $491 $435 $28 $14 Q1 '20 Q1 '21 Q1 '22 Q1 '20 Q1 '21 Q1 '22 22
Slide 23: Penske Australia
PENSKE AUSTRALIA Exclusive distributor of certain heavy/medium-duty trucks, buses, and refuge collection vehicles; distributor of diesel/gas engines and power systems across Australia, New Zealand and portion of the Pacific Western Star, MAN, Dennis Eagle MTU, Detroit Diesel, Allison Transmissio
Slide 24: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS 373,000 vehicles on the road Over 850 electric light, medium and heavy-duty vehicles in service test fleet or on order More than 3,000 locations worldwide Q1 total revenue up 22% to $3.1 Bil Q1 income $410 million, up 121% Return on sales 13.4% PAG recor
Slide 25: PTS Performance Summary
PTS PERFORMANCE SUMMARY Revenue Earnings Before Taxes ($ in Billions) ($ in Millions) $410 $3.1 $2.2 $2.5 $186 $47 Q1 '20 Q1 '21 Q1 '22 Q1 '20 Q1 '21 Q1 '22 25
Slide 26: PTS Earnings Contribution – Q1
PTS EARNINGS CONTRIBUTION – Q1 ($ in millions) $119 $54 $26 $12 $16 $14 2017 2018 2019 2020 2021 2022 26
Slide 27: Digital Marketing/Retailing
Overview Highlights Performance Review Digital Marketing/Retailing Non-GAAP
Slide 28: Modernizing the Customer Journey
MODERNIZING THE CUSTOMER JOURNEY Digitization and Automation Improves the Overall Experience, Drives Satisfaction and Loyalty CUSTOMER ACQUISITION CUSTOMER RETENTION Buy Online / Inventory Advertising CRM Communication Collision Photo Preferred Purchase Chat/Text Online Service Estimatin
Slide 29: Global Reputation Focus
GLOBAL REPUTATION FOCUS TOP-DOWN FOCUS ON EXCELLENT CUSTOMER SERVICE DRIVES POSITIVE REPUTATION SCORES 29
Slide 30: Vehicle Sourcing
VEHICLE SOURCING Trade/Sell Opportunities Vehicle evaluation tools available on every dealer website Trade-ins, lease returns, off-street purchases directly from consumers Self-Sourced Q1 2022 U.S. Franchised 85% U.K. Franchised 80% CarShop U.S. 66% CarShop U.K. 39% 30
Slide 31: U.S. Digital Retailing
U.S. DIGITAL RETAILING Preferred Purchase Current platform on our franchise websites where an OEM solution is not yet offered Offers a hybrid model so customers can shop however they choose OEM Programs Benefit from OEM marketing Technology is current Enables “Buy Online” from OEM sites
Slide 32: Browse – Buy – Connect (U.K.)
BROWSE – BUY – CONNECT (U.K.) Buy & Reserve Online (www.sytner.co.uk) Reserve for £99 allowing customer to choose pick-up dealership Buy Online via fully integrated finance application or by card Omni-channel approach enabling customers to shop how they choose CarShop Platform (www.carshop.co.
Slide 33: Online Service Appointments
ONLINE SERVICE APPOINTMENTS 441,000 online/BDC appointments scheduled in Q1 2022 18% increase from Q1 2021 33
Slide 34: Non-GAAP
Overview Highlights Performance Review Digital Marketing/Retailing Non-GAAP
Slide 35: EBITDA Reconciliation
EBITDA RECONCILIATION The following table reconciles EBITDA for the three months ended March 31, 2022 and 2021 ($ in Millions) Q1 ’22 Q1 ’21 % Chg Net Income $369.5 $183.1 +101.8% Depreciation $ 31.9 $ 29.3 +8.9% Other Interest $ 16.5 $ 17.9 (7.8%) Income Taxes $128.1 $ 64.5 +98.6% EBITDA $546.0 $29
Slide 36: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, adj EBITDA and the leverage ratio for the trailing twelve months ended March 31, 2022 ($ in Millions) Nine Three Trailing Twelve Months Ended Months Ended Months Ended December 31, 2021 March 31, 2022 March 31
Slide 37: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2021, 2020 and 2019 ($ in Millions) 12M ’21 12M ’20 12M ‘19 Net Income $1,192.7 $ 545.3 $ 435.1 Add: Depreciation $ 121.5 $ 115.5 $ 109.6 Add: Other Interest $
Slide 38: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA, and Leverage Ratio as of December 31, 2018 and 2017 ($ in Millions) 12M ’18 12M ‘17 Net Income $ 470.3 $ 612.8 Depreciation $ 103.7 $ 95.1 Other Interest $ 114.7 $ 107.4 Income Taxes $ 134.3 ($64.
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Penske Automotive Group — Q1 2022 Earnings Presentation on 6ix