Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Q2 2023 Earnings Presentation
26 slides from Group 1 Automotive's earnings presentation, Jul 26, 2023
Slide 1: Second Quarter 2023 Financial Results
Second Quarter 2023 Financial Results Investor Presentation July 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) 150 Dealerships Philadelphia (1) 80% 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 39% of GPI’s 2Q23 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. 2Q23 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 2Q23 YTD
Total Consolidated New Vehicle Brand Mix 2Q23 YTD The Company’s brand diversity allows it to reduce the risk of evolving consumer preferences. 18% Revenue Mix Unit Mix 23% 20% 34% 44% 12% 36% 43% 9% 8% 8% Import Luxury Domestic Import Luxury Domestic 6% 6% 6% 5% 4% 4% 4% 3% 3% 2% 2% <1% Other *Based
Slide 8: Transformational Growth Strategy
Transformational Growth Strategy First priority for capital allocation is growing the company through acquisitions $4.4B in acquired revenues since the beginning of 2021 Capital Repurchased 3.3 million common shares over the past 18 months ended June 30, 2023, representing 19% of Allocation ou
Slide 9: Balanced Capital Allocation
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 $1.0B (21 franchises) (20 franchises) (17 franchises) (15 franchises) (58 franchises) (11 franch
Slide 10: Parts & Service Overview
2Q23 YTD U.S. SS P&S Sales Parts & Service Overview +10.6%YoY Stability of free cash flow through economic cycles. Service-to Service Retention by Model Year(*) Above sector-average growth through our strategic emphasis on customer service Attractive benefits including a 4-day work week for service
Slide 11: Battery Electric Vehicle (BEV) 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 $8,440 for a 2022 Audi Q5 ICE -- an immat
Slide 12: AcceleRide Digital Platform Summary
AcceleRide drives customer AcceleRide Digital Platform Summary loyalty, retention, and employee efficiencies Buy A Ride Sell A Ride Inventory selection of new, used, and CPO provides identical user experience Instant cash offer All credit applications are digital and Offer valid for 7 days or 250 mi
Slide 13: Digital Innovation
AcceleRide allows us to reach more customers and drives Digital Innovation loyalty after the sale AcceleRide Aftersales Platform Interactions Salesperson Productivity Online Service Appointments 80% +32% 36% Penetration Customers engaged with AcceleRide during transaction As compared to pre-covid le
Slide 14: Used Vehicle Overview
GPI Outperforms the Used Vehicle Industry Used Vehicle Overview FY22 GPI U.S. Same Store Unit Sales: Flat YoY FY22 U.S. Used Market Unit Sales: -10% YoY Total Used Vehicle U.S. Used Market Size1 41 U.S. Market Share2 Revenues ($MM)* (MM) Annual Used Vehicle Units 40 40 +11.6% 2016-2022 39 39 29% CAG
Slide 15: Finance & Insurance Overview
2Q23 U.S. Same Store F&I GP PRU: Finance & Insurance Overview 5.3% increase in 2Q23 vs 1Q23 Improved F&I profitability via U.S. F&I Gross Profit $2,428 focus on compliance & growth $2,320 Per Retail Unit includes: (PRU) $2,155 $1,951 $1,782 Consolidation of lender base $1,710 $1,647 $1,599 Integrati
Slide 16: Debt & Interest Rate Exposure
~65% fixed rate debt Debt & Interest Rate Exposure including floorplan At June 30, 2023, Group 1’s total debt including floorplan was $3.4B: Debt Maturities excludes floorplan ~$1,160 million of floorplan debt $1,000M ~$765 million of mortgage debt $750M ~$750 million of bond debt ~$450 million of a
Slide 17: Real Estate Strategy
Real Estate Strategy Dealership Property Breakdown by Region Owned vs. Leased Property Trend (as of June 30, 2023) 157 169 202 205 # Properties Dealerships Region Owned Leased 43% 38% 36% 35% % L eased United States 108 42 United Kingdom 25 30 Total 133 72 65% 57% 62% 64% % Owned 2017 2019 2021 2Q23
Slide 18: 2022 ESG Highlights
2022 ESG Highlights Environmental Social Governance First Greenhouse Gas (GHG) inventory Our Chief Diversity Officer, who Completed an ESG Materiality analysis conducted by a third-party expert provides executive oversight of Assessment that identified key material diversity, equity and inclus
Slide 19: 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 20: 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 21: Conclusion
Conclusion Completion of $4.4B 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 operations in July 2022 cost structure as it gains scale Flexible & balanced capit
Slide 22: Appendix & Non-GAAP Reconciliations
Appendix & Non- GAAP Reconciliations Page 22
Slide 23: 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 24: Reconciliation: Adjusted Cash Flow (Non-GAAP)
Reconciliation: Adjusted Cash Flow (Non-GAAP) 2023 (unaudited, $MM) 2016 2017 2018 2019 2020 2021 2022 YTD Operating Cash Flow (GAAP) $ 384 $ 197 $ 270 $ 371 $ 805 $ 1,260 $ 586 $ 239 Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset account and net acquisit
Slide 25: Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP) YTD (unaudited, $MM) 2016 2017 2018 2019 2020 2021 2022 2023 As Reported EPS $ 6.67 $ 10.08 $ 7.83 $ 9.34 $ 15.51 $ 30.11 $ 47.14 $ 23.13 After Tax Adjustments: Asset impairments and accelerated depreciation 0.93 0.59 1.65 0.94 1.69 0.07 0
Slide 26: group1auto.com
group1auto.com Page 26