Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q2 2022 Earnings Presentation
42 slides from Penske Automotive's earnings presentation, Jul 27, 2022
Slide 1: Second Quarter 2022 Financial Results
Second 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
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 4: Company Overview
COMPANY OVERVIEW A $26 billion diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers 26,000 employees Operations across four continents and nine countries Retail Automotive U.S., U.K., Germany, Italy, Spain, and Jap
Slide 5: Investment Overview
INVESTMENT OVERVIEW 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 the
Slide 6: Highlights
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 7: Q2 2022 Key Takeaways
Q2 2022 KEY TAKEAWAYS All-time record quarterly earnings before taxes, net income and earnings per share EBT increased 8% to $500 million Net income increased 10% to $374 million Earnings per share increased 17% to $4.93 Repurchased 3.5 million shares of common stock for $362.7 million yea
Slide 8: Q2 2022 Key Highlights
Q2 2022 KEY HIGHLIGHTS Retail Automotive Retail Commercial Trucks Capital Allocation Same-store total units retailed of Retailed 4,174 new & used trucks, +1%; Completed acquisitions and open points 109,459, -17% same-store units -8% representing approx. $745 million YTD (June 2022) in revenue
Slide 9: Q2 & 6M Performance Highlights
Q2 & 6M PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q2 ’22 Q2 ’21 Chg 6M ’22 6M ’21 Chg Revenue $6,907 $6,988 -1% $13,882 $12,761 +9% Same-Store Revenue $5,694 $6,179 -8% $11,461 $11,356 +1% Income from Cont. Ops $500 $464 +8% $997 $711 +40% Before Taxes Income from Cont. Ops $37
Slide 10: Q2 2022 Revenue & EBT
Q2 2022 REVENUE & EBT Segment Segment Global Revenue Revenue Earnings Before Tax $6.9 Billion $6.9 Billion $500 Million 11% 32% 11% 61% 87% 60% 29% 2% 7% North America Retail Automotive Retail Commercial Truck United Kingdom Non-Automotive Investments & Other* Other International *Consists of non-au
Slide 11: 6M 2022 Revenue & EBT
6M 2022 REVENUE & EBT Segment Segment Global Revenue Revenue Earnings Before Tax $13.9 Billion $13.9 Billion $997 Million 11% 32% 11% 60% 87% 61% 28% 2% 8% North America Retail Automotive Retail Commercial Truck United Kingdom Non-Automotive Investments & Other* Other International *Consists of non-
Slide 12: 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. – 21% CarShop – 8% 11% 11% 10% 8% 7% 7% 6% 5% 3% 3% 1% 1% 1% 1% Other 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 $1,486 2 $1,000 1.8x 1 $500 0.8x 0.7x 0 $0 2017 2018 2019 2020 2021 6M 2022 -$500 -1 Debt Leverage Refer to non-gaap reconciliation schedule on pages 36-39 13
Slide 14: Performance Review
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 15: Retail Automotive Revenue
RETAIL AUTOMOTIVE REVENUE Diversified Revenue Stream Drives Profitability 6% New 1% 3% 10% Used 21% 29% 41% GROSS REVENUE S&P PROFIT F&I 15% 40% 34% F&WH 15
Slide 16: Sequential Retail Automotive Key Metrics
SEQUENTIAL RETAIL AUTOMOTIVE KEY METRICS Same-Store Q3 ’21 Q4 ’21 Q1 ’22 Q2 ‘22 Volume Metrics New Units 44,107 41,895 43,804 42,980 Used Units 68,380 55,921 65,414 66,479 Total Units 112,487 97,816 109,218 109,459 Gross Per Unit New $5,914 $6,832 $6,770 $6,851 Used $2,762 $2,913 $2,300 $2,235 F&I $
Slide 17: Q2 & 6M Retail Automotive Key Metrics
Q2 & 6M RETAIL AUTOMOTIVE KEY METRICS Same-Store Q2 ’22 Q2 ’21 Chg 6M ’22 6M ’21 Chg Volume Metrics New Units (Q2 Chg – U.S. -30%; U.K. -14%) 42,980 57,715 -26% 86,704 107,944 -20% Used Units (Q2 Chg – U.S-15%; U.K. -5%) 66,479 74,267 -11% 131,756 134,477 -2% Total Units 109,459 131,982 -17% 218,460
Slide 18: Retail Automotive Same-Store Revenue
RETAIL AUTOMOTIVE SAME-STORE REVENUE Ex cl Ex cl Q2 ’22 Q2 ’21 CHG 6M ’22 6M ’21 CHG F/ X F/ X New Vehicle $2,307 $2,806 -18% -15% $4,641 $5,212 -11% -9% Used Vehicle $2,278 $2,316 -2% +4% $4,603 $4,114 +12% +16% F&I $214 $212 +1% +5% $424 $379 +12% +15% Service & Parts $569 $545 +4% +8% $1,135 $1,0
Slide 19: Stand Alone Used
STAND ALONE USED Operate stand-alone used vehicle centers across U.S./U.K. One price; no haggle approach In-store or 100% on-line TOTAL SAME-STORE Q2 ’22 Q2 ’21 Chg Q2 ’22 Q2 ’21 Chg Units 20,124 18,742 +7% 18,386 18,371 --- Revenue ($ in Millions) $468 $408 +15% $423 $400 +6% Avg Trans Price
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 39 locations across North America Service and parts gross profit provides 68% of total gross profit in Q2 2022 6.8% return on sales in Q2 Q2 fixed co
Slide 21: Q2 & 6M 2022 Retail Commercial Truck Key Metrics
Q2 & 6M 2022 RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q2 ’22 Q2 ’21 CHG 6M ’22 6M ’21 CHG VOLUME METRICS New Units 3,216 3,314 -3% 5,774 4,935 +17% Used Units 583 832 -30% 1,167 1,644 -29% TOTAL 3,799 4,146 -8% 6,941 6,579 +6% GROSS PER UNIT New $7,178 $5,909 +22% $7,800 $6,516 +20% Used $9,85
Slide 22: PTG Performance Summary
PTG PERFORMANCE SUMMARY Q2 Total Revenue 6M Total Revenue ($ in Millions) ($ in Millions) $769 $1,561 $625 $1,060 $399 $891 Q2 '20 Q2 '21 Q2 '22 Q2 '20 Q2 '21 Q2 '22 Q2 Earnings Before Taxes 6M Earnings Before Taxes ($ in Millions) ($ in Millions) $52 $111 $40 $67 $15 $28 Q2 '20 Q2 '21 Q2 '22 Q2 '20
Slide 23: Penske Australia
PENSKE AUSTRALIA Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles; distributor of diesel/gas engines and power systems On-Highway Power Systems across Australia, New Zealand and portions of the Pacific Western Star, MAN, Dennis Eagle MT
Slide 24: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS More than 386,000 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 Q2 total revenue up 20% to $3.3 billion Record Q2 income of $472 million, up 33% Return on
Slide 25: PTS Performance Summary
PTS PERFORMANCE SUMMARY Q2 Total Revenue 6M Total Revenue ($ in Billions) ($ in Billions) $2.8 $3.3 $6.4 $2.3 $2.0 $4.4 $4.2 $5.3 Q2 '19 Q2 '20 Q2 '21 Q2 '22 6M '19 6M '20 6M '21 6M '22 Q2 Income 6M Income ($ in Millions) ($ in Millions) $472 $882 $354 $540 $132 $104 $221 $151 Q2 '19 Q2 '20 Q2 '21 Q
Slide 26: PTS Earnings Contribution – 6M Year to Date
PTS EARNINGS CONTRIBUTION – 6M YEAR TO DATE ($ in millions) $255 $156 $64 $51 $44 2018 2019 2020 2021 2022 26
Slide 27: Acquisitions
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 28: Acquisitions
ACQUISITIONS Acquired ten retail automotive franchises consisting of six franchises in the U.K. and four franchises in the U.S. Representing $445 million in annualized revenue Opened two retail automotive franchises (open points) in the U.S. with expected annualized revenue of $150 million A
Slide 29: Acquired Dealerships
BMW/MINI Escondido Honda Leander Audi North Orange County Hyundai Noblesville BMW/MINI S.E. London Genesis Noblesville Team Truck Centers, Ontario Canada Mercedes-Benz North London
Slide 30: Digital Marketing/Retailing
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 31: Global Reputation Focus
GLOBAL REPUTATION FOCUS TOP-DOWN FOCUS ON EXCELLENT CUSTOMER SERVICE DRIVES POSITIVE REPUTATION SCORES U.S. FRANCHISE UNITED CARSHOP LOCATIONS KINGDOM GLOBAL 4.7 4.4 4.7 Lifetime Avg. Google Lifetime Avg. Google Lifetime Avg. Google Star Rating Star Rating Star Rating 31
Slide 32: 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 6M 2022 U.S. Franchised 85% U.K. Franchised 80% CarShop U.S. 70% CarShop U.K. 46% 32
Slide 33: 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 Leading technology Enables “Buy online” from OEM sites Int
Slide 34: 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 35: Online Service Appointments/Payments
ONLINE SERVICE APPOINTMENTS/PAYMENTS 515,000 online/business development center service appointments scheduled in Q2 2022 $55 million in online payments made in Q2 2022 35
Slide 36: Non-GAAP
Overview Highlights Performance Review Acquisitions Digital Marketing/Retailing Non-GAAP
Slide 37: Consolidated Non-GAAP Reconciliations
CONSOLIDATED NON-GAAP RECONCILIATIONS The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and six months ended June 30, 2022 and 2021 ($ in millions, except per sh
Slide 38: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following tables reconciles reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and adjusted EBITDA for the three and six months ended June 30, 2022 and 2021 nm = not meaningful (1) Related to a $17 million e
Slide 39: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, adj EBITDA and the leverage ratio as of June 30, 2022 and December 31, 2021 Six Six Trailing Twelve Twelve Months Ended Months Ended Months Ended Months Ended (Amounts in Millions) December 31, 2021 June 30, 2
Slide 40: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2021, 2020 and 2019 ($ 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 41: 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.
Slide 42: FENSKE
FENSKE
Penske Automotive Group — Q2 2022 Earnings Presentation on 6ix