Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q2 2023 Earnings Presentation
38 slides from Penske Automotive's earnings presentation, Jul 26, 2023
Slide 1: Second Quarter 2023 Financial Results
SECOND QUARTER 2023 FINANCIAL RESULTS July 2023
Slide 2: Forward-Looking Statement Disclaimer
FORWARD-LOOKING STATEMENT DISCLAIMER Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.'s financial performance and future plans. Actual results may vary materially because of risks and uncertainties th
Slide 3: Company Overview: A Diversified Transportation Services Company
COMPANY OVERVIEW A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA As of June 30, 2023: 27,000+ $14.8B Employees worldwide 6M YTD ‘23 revenue 337 4 9 Retail automotive Continents Countries franchised dealerships Markets in Markets Outside North America of North
Slide 4: Retail Automotive Brand Mix
RETAIL AUTOMOTIVE BRAND MIX 71% 20% 1% 8% Premium Volume Non-U.S. U.S. CarShop 25% (YTD as of June 30, 2023) (% of Total Worldwide Automotive Dealership Revenue) 11% 10% 9% 8% 8% 8% 7% 4% 3% 3% 2% 1% 1% Other PENSKE AUTOMOTIVE GROUP / 4
Slide 5: Capital Allocation History
CAPITAL ALLOCATION HISTORY 2018 2019 2020 2021 2022 (In Millions) Dividends $121 $131 $68 $143 $154 Cap Ex $306 $245 $186 $249 $283 Stock Repurchases, including net share settlements (In Thousands) Shares 1,587 3,987 1,028 3,262 8,214 Amount $75 $174 $35 $294 $887 Acquisitions $309 $327 --- $432 $39
Slide 6: Historical Long-Term Debt and Leverage
HISTORICAL LONG-TERM DEBT AND LEVERAGE (USD in Millions) $2,500 $2,360 3.5 3 $2,000 2.9x $1,690 $1,744 $1,622 2.5 $1,500 $1,474 2 $1,000 1.8x 1.5 1 $500 0.9x 0.8x 0.8x 0.5 $- 0 2019 2020 2021 2022 Jun '23 Debt Leverage Refer to non-gaap reconciliation schedules on pages 37-39 PENSKE AUTOMOTIVE GROUP
Slide 7: Q2 2023 & 6M 2023 Review
Q2 2023 & 6M 2023 REVIEW
Slide 8: Q2 2023 Takeaways
($ in millions, except EPS) Reported Revenue $7,469 EBT $400 Net Income $301 Earnings Per Share $4.41 Second quarter revenue; increased 8% compared to Q2 2022 Q2 2023 SG&A as a percent of gross profit was 67.4%, improved 10 bps TAKEAWAYS sequentially SG&A as a percentage to gross profit is 1,0
Slide 9: PAG Performance Summary
PAG PERFORMANCE SUMMARY Q2 Total Revenue ($ in Billions) Q2 Income ($ in Millions) Q2 EPS $7.5 $374 $4.93 $7.0 $6.9 $339 $301 $4.41 $4.20 Q2 '21 Q2 '22 Q2 '23 Q2 '21 Q2 '22 Q2 '23 Q2 '21 Q2 '22 Q2 '23 6M Total Revenue ($ in Billions) 6M Income ($ in Millions) 6M EPS $14.8 $742 $599 $9.70 $8.72 $13.9
Slide 10: Q2 Key Highlights
Q2 KEY HIGHLIGHTS Retail Automotive Capital Allocation Total same-store units delivered (including Agency) increased Increased dividend 9% in July to $0.72 or 26%, in 2023 6% to 120,203 Share repurchases: Same-store revenue performance compared to Q2 ‘22: Q2 ‘23 1.7 million shares for $240
Slide 11: Q2 2023 Global Revenue
32% $7.5 60% Billion Q2 2023 8% GLOBAL REVENUE North America United Kingdom Other International PENSKE AUTOMOTIVE GROUP / 11
Slide 12: Q2 2023 Revenue & EBT by Segment
SEGMENT SEGMENT REVENUE EBT 14% 12% $7.5 $400 18% 86% BILLION 65% MILLION 2% 3% Q2 2023 REVENUE & EBT BY SEGMENT Retail Automotive Retail Commercial Truck Non-Automotive Penske Australia Investments* Power Systems Commercial Trucks *Consists of non-automotive equity method investments which includes
Slide 13: Q2 & 6M Performance Highlights
Q2 & 6M PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q2 ‘23 Q2 ‘22 Chg 6M ‘23 6M ‘22 Chg Revenue $7,469 $6,907 +8% $14,808 $13,882 +7% Excl F/X $7,492 +8% $15,129 +9% Retail Auto Same-Store Revenue $6,264 $5,919 +6% $12,282 $11,826 +4% Excl F/X $6,271 +6% $12,551 +6% Inc. from Con
Slide 14: Retail Automotive Key Metrics
RETAIL AUTOMOTIVE KEY METRICS Same-Store Q2 ’23 Q2 ’22 Chg 6M ’23 6M ’22 Chg VOLUME METRICS New Units* 48,923 44,920 +9% 94,403 89,282 +6% Used Units 63,726 68,921 -8% 128,555 135,390 -5% Total 112,649 113,841 -1% 222,958 224,672 -1% Agency Units 7,554 --- --- 13,428 --- --- Total Units 120,203 113,
Slide 15: Retail Automotive Same-Store Revenue
RETAIL AUTOMOTIVE SAME-STORE REVENUE Q2 ’23 Q2 ’22 CHG 6M ’23 6M ’22 CHG New Vehicle $2,782 $2,417 +15% $5,395 $4,814 +12% Used Vehicle $2,270 $2,353 -4% $4,461 $4,722 -6% F&I $209 $218 -4% $409 $433 -6% Service & Parts $653 $590 +11% $1,289 $1,167 +10% Fleet & Wholesale $350 $341 +3% $728 $690 +6%
Slide 16: CarShop Used Vehicles
CARSHOP USED VEHICLES
Slide 17: CarShop used vehicle centers
Operate 20 used vehicle centers across U.S./U.K. One price; no haggle approach In-store or 100% on-line PENSKE AUTOMOTIVE GROUP / 17
Slide 18: CarShop Performance Summary
PERFORMANCE SUMMARY Q2 Units Q2 Revenue ($ in Millions) Q2 Gross/Unit 20,124 $475 $2,701 18,742 18,206 $468 $2,093 $2,076 $408 Q2 '21 Q2 '22 Q2 '23 Q2 '21 Q2 '22 Q2 '23 Q2 '21 Q2 '22 Q2 '23 6M Units 6M Revenue ($ in Millions) 6M Gross/Unit 39,647 37,371 $984 $964 $2,515 30,137 $2,124 $2,065 $651 6M
Slide 19: Premier Truck Group
PREMIER TRUCK GROUP
Slide 20: Premier Truck Group
PREMIER TRUCK GROUP One of the largest dealership group’s for Daimler Trucks N.A. Retails new and used Freightliner and Western Star Trucks Acquired Transolution Truck Centres in the greater Winnipeg, Manitoba market area with 5 locations 44 locations across North America Retailed over 10,
Slide 21: Retail Commercial Truck Key Metrics
RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q2 ’23 Q2 ’22 Chg 6M ‘23 6M ‘22 Chg VOLUME METRICS New Units 4,510 3,531 +28% 8,610 7,175 +20% Used Units 701 643 +9% 1,327 1,464 -9% TOTAL 5,211 4,174 +25% 9,937 8,639 +15% GROSS PER UNIT New $8,211 $7,504 +9% $7,665 $7,493 +2% Used $5,733 $9,133 -37%
Slide 22: Penske Australia / New Zealand
PENSKE AUSTRALIA / NEW ZEALAND
Slide 23: Penske Australia/New Zealand
PENSKE AUSTRALIA/NEW ZEALAND Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles; distributor of diesel/gas engines and power systems across Australia, New Zealand and portions of the Pacific Western Star, MAN, Dennis Eagle MTU, Detroit Di
Slide 24: Penske Australia Power Systems
PENSKE AUSTRALIA POWER SYSTEMS PRIME POWER - WAITSIA BERGEN GAS POWER STATION MINING PENSKE AUTOMOTIVE GROUP / 24
Slide 25: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS
Slide 26: Penske Transportation Solutions (PTS)
PENSKE TRANSPORTATION SOLUTIONS (PTS) Penske Truck Leasing Truck Full-Service Contract Used Rental Leasing Maintenance Trucks Penske Logistics Services Dedicated Distribution Freight Professional Contract Center Management Services Carriage Management & Brokerage PENSKE AUTOMOTIVE GROUP / 26
Slide 27: PTS Highlights
PTS HIGHLIGHTS Managed fleet of over 431,000 trucks, tractors and trailers Fleet goal of 500,000 by 2025 OPERATING REVENUE (For the three months ended June 30, 2023) Q2 2023 Highlights: Operating revenue of $2.7 billion, +6% Logistics Net income of $253 million, -46% 28% Return on sales
Slide 28: PTS Performance Summary
PTS PERFORMANCE SUMMARY Operating Revenue ($ in Billions) Income ($ in Millions) $354 $472 $2.8 $2.5 $2.7 $253 Q2 '21 Q2 '22 Q2 '23 Q2 '21 Q2 '22 Q2 '23 $4.9 $5.3 $540 $882 $533 $4.3 6M '21 6M '22 6M '23 6M '21 6M '22 6M '23 PENSKE AUTOMOTIVE GROUP / 28
Slide 29: PTS Fleet Growth
PTS FLEET GROWTH Managed fleet consists of trucks, tractors and trailers under lease, rental and/or maintenance contracts (Units in Thousands, amounts as of 12/31 unless otherwise noted) 431 416 360 327 327 297 271 247 231 215 205 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 June 2023
Slide 30: Omni Channel & Digital
OMNI CHANNEL & DIGITAL
Slide 31: Spectrum of Retail Operations
SPECTRUM OF RETAIL OPERATIONS 100% Online 100% In-Store End-to-End Platform OEM Programs Digital Retailing In-Store CarShop USA OEM powered solutions Enabling customers to In-person transaction at for brand integration shop how they choose the dealership Benefit from OEM Integrated end-to-end market
Slide 32: Digitizing Sales and Service
DIGITIZING SALES AND SERVICE SALES SERVICE Hybrid Purchase Process Through Dealer Websites AI Service Scheduling Immersive Chat and Text Immersive Chat and Text (AI to human-powered) (AI to human-powered) Virtual Test Drives and Photo Vehicle Walkarounds Estimating Trade/Sell Valuations Vehicle Stat
Slide 33: Non-GAAP Reconciliations
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Slide 34: EBITDA Reconciliation
EBITDA RECONCILIATION The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) for the three months ended June 30, 2023 and 2022 Three Months Ended Change ($ in Millions) June 30, 2023 vs 2022 2023 2022 $ % Net Income $302.6 $37
Slide 35: EBITDA & Leverage Ratio Reconciliation
EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA and the leverage ratio for the trailing twelve months ended June 30, 2023 ($ in Millions) Six Six Trailing Twelve Months Ended Months Ended Months Ended December 31, 2022 June 30, 2023 June 30, 2023 Net Income $640.8 $602.2
Slide 36: EBITDA, Adj. EBITDA & Leverage Ratio Reconciliation
EBITDA, ADJ. EBITDA & LEVERAGE RATIO RECONCILIATION The following table reconciles EBITDA, Adj. EBITDA and Leverage Ratio as of December 31, 2022, 2021, 2020 and 2019 ($ in Millions) 12M ‘22 12M ’21 12M ’20 12M ‘19 Net Income $1,386.2 $1,192.7 $545.3 $435.1 Add: Depreciation $127.3 $121.5 $115.5 $10
Slide 37: Agency
Beginning in 2023, we transitioned our Mercedes-Benz U.K. dealerships to an agency model under which these dealerships receive a fee for facilitating the sale by the manufacturer of a new vehicle but do not hold the vehicle in inventory. Vehicles sold under this agency model are counted as new agenc
Slide 38: Automotive
Automotive
Penske Automotive Group — Q2 2023 Earnings Presentation on 6ix