Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Investor Presentation (April 2021)
44 slides from Sonic Automotive's investor presentation, Apr 29, 2021
Slide 1: Sonic Automotive – Investor Presentation April 2021
® Sonic Automotive – Investor Presentation April 2021 Updated April 29, 2021 Exhibit 99.2
Slide 2: Forward-Looking Statements
2 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
Slide 3: Company Overview
3 Company Overview
Slide 4: Sonic Automotive: Who We Are
4 ® Sonic Automotive: Who We Are QUICK FACTS (NYSE: SAH) a Fortune 500 Company and One of the Nation’s Largest Automotive Retailers 107 20+ 14 14 $9.8 Billion $1.4 Billion 93K New Vehicles Sold 159K Total Revenues Automotive Brands Locations Used Vehicles Sold States Collision Centers Gross Profit N
Slide 5: Investment Highlights
5 Investment Highlights Multiple Growth And Profit Drivers For Franchised Segment Unique, High Return EchoPark Business Model Broad Revenue Stream Diversification Complementary Relationship – Sonic Franchised And EchoPark Disciplined Capital Allocation To Accelerate EchoPark Growth Focused On Expens
Slide 6: Revenue Composition by Geography
6 Revenue Composition BY GEOGRAPHY TX 28% CA 26%CO 10% TN 7% FL 7% AL 6% NC 5% GA 3% VA 2% MD 2% SC 2% NV 2% Concentrated in Major Metro Markets Geographic Footprint, Revenue Streams and Brand Mix Offer Attractive Diversification Across the Automotive Retail Space Note: Percentages are Percent of To
Slide 7: Revenue Composition – Diversified Revenue Streams
7 Revenue Composition – Diversified Revenue Streams Note: Percentages are Percent of Total for FY 2020 5% 34% 13% 42% 39% 7%43% 17% Revenue Gross Profit New Vehicle Used Vehicle (Including Wholesale) Parts, Service & Collision Repair ("Fixed Operations") Finance & Insurance ("F&I") Brand Distributio
Slide 8: EchoPark Automotive – A Unique Growth Story
8 ® EchoPark Automotive – A Unique Growth Story Expansion Plan For 140+ Point Distribution Network By 2025 Unique, High Return Business Model 1 to 4-Year-Old Vehicles - Nearly New With Remaining OEM Warranty 30% of Guests Travel More Than 30 Minutes To Shop Our Inventory Priced Up to $3,000 Below Ma
Slide 9: EchoPark – High Volume Model Drives Superior Returns
9 EchoPark – High Volume Model Drives Superior Returns Gross Profit Per Unit (“GPU”) Franchised Used EchoPark B (W) Front-End Used Vehicle GPU $1,300 $(100) F&I GPU $1,600 $2,250 Parts and Service Reconditioning GPU $500 - Total Used-Related GPU $3,400 $2,150 ($1,250) Volume Differential Factor x1 X
Slide 10: Franchised Dealerships and EchoPark: Complementary Relationship
10 Franchised Dealerships ® ® Complementary Relationship Between Segments • Thrives When New Vehicle Industry Is Healthy, Particularly Where Luxury Brands Are Strong • Diverse Revenue Streams • Relatively Low Fixed Costs And Multiple Operational Levers • Further Growth Opportunities: Parts and Ser
Slide 11: Industry-Leading Used Vehicle Volume Throughput
11 Industry-Leading Used Vehicle Volume Throughput 82 108 Peer Average* Sonic Franchised (Q1 2021) * Peer Average Is Store Count As Of And Unit Sales For The Quarter Ended December 31, 2020 For GPI, And As Of And For The Quarter Ended March 31, 2021 For ABG, AN, LAD And PAG ** CarMax Data Is Store C
Slide 12: Used Vehicle Inventory Days' Supply
12 35 27 Peer Average* Sonic Franchised (March 31, 2021) * Peer Average Is As Of December 31, 2020 For GPI, And As Of March 31, 2021 For ABG, AN, LAD And PAG ** CarMax Data Is As Of February 28, 2021 Note: Data Source – Company Filings, Calculated Based On Reported Trailing Quarter Cost Of Sales If
Slide 13: Strategic Direction
13 Strategic Direction • Drive New And Used Vehicle Profit Growth Through Multiple Channels (Traditional Sale Or Lease, Online Selling) • Continued Growth Opportunity In Parts & Service, F&I Per Unit • Ongoing Profitability Enhancement Through SG&A Expense Control, Inventory Management • Early-Stage
Slide 14: EchoPark
14 EchoPark
Slide 15: EchoPark – Brand Promise
15 EchoPark – Brand Promise Up To 40% Below New Vehicle Price Up To 10% Below Used Vehicle Market Price High Quality, Low Mileage Vehicle With Existing Warranty Transparent Guest-Centric Experience New Car Feel Without The New Car Price Complete Purchase In Under An Hour Zero Reported Accidents On C
Slide 16: EchoPark – Developing Nationwide Distribution Network
16 EchoPark – Developing Nationwide Distribution Network 2014 2015 2016 2017 2018 2019 2020 2021E 2022E 2023E 2024E 2025E 2 2 2 5 8 9 16 41 66 91 116 140+ Cumulative Locations By Year Large Retail Hub Medium Retail Hub Delivery Center Existing Retail Hub Existing Delivery Center Delivery Center Cove
Slide 17: EchoPark – Modeled 4-Wall Economics At Maturity
17 EchoPark – Modeled 4-Wall Economics At Maturity (Modeled Metrics Assume 100% Maturity) Delivery Center Medium Retail Hub Large Retail Hub Average Monthly Retail Unit Volume 300 750 1,500 Average Vehicle Selling Price 20,500$ 20,500$ 20,500$ Total Annual Revenues 82,000,000$ 205,000,000$ 410,000,0
Slide 18: EchoPark – Delivery Center Model
18 EchoPark – Delivery Center Model Existing Retail Hub Example Delivery Center Market Coverage Opportunity Delivery Center Model • Utilize Existing Retail Hub For Inventory Storage And Reconditioning (Asset Light Expansion) • Advertise Inventory In Surrounding Markets • Drive Incremental eCommerce
Slide 19: EchoPark – 5-Year Accelerated Growth Forecast
19 EchoPark – 5-Year Accelerated Growth Forecast 57,161 575,000 FY 2020 FY 2025E Retail Unit Sales Volume FY 2020 FY 2025E $1.4 $14.0 Total Revenues (In Billions) 58% CAGR $221.0 FY 2020 FY 2025E Pre-Tax Profit (Loss) (In Millions) ($1.1) $11.0 $261.0 FY 2020 FY 2025E EBITDA (In Millions) Rate Of Ex
Slide 20: EchoPark – Growth Path
20 EchoPark – Growth Path 212 660 881 920 764 941 1,136 1,585 1,685 1,673 2,049 2,400 4,496 5,518 7,459 7,698 8,762 11,051 12,587 13,206 12,676 13,986 13,207 15,127 14,841 19,670 $- $100 $200 $300 $400 $500 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 20
Slide 21: EchoPark – Adjusted EBITDA Trend
21 EchoPark – Adjusted EBITDA Trend ($2,802) ($1,115) ($3,353) ($2,168) ($3,029) ($2,059) $4,957 $4,792 $6,352 $5,299 $5,169 $5,569 $3,149 ($2,921) $6,162 $6,093 $6,214 $6,831 $4,804 $(290) $6,719 $(4,000) $(2,000) $- $2,000 $4,000 $6,000 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 20
Slide 22: EchoPark – Market Maturity Comparison
22 EchoPark – Market Maturity Comparison - 150 300 450 600 750 900 1,050 1,200 1,350 1,500 1,650 1,800 Denver/Colorado Springs Dallas San Antonio Charlotte Houston Long Beach Tampa Nashville Atlanta Syracuse Baltimore-Laurel Phoenix Greenville Delivery Center Knoxville Delivery Center Average Monthl
Slide 23: Franchised Dealerships
23 Franchised Dealerships
Slide 24: Franchised Dealerships
24 New & Used Vehicle Sales Parts & Service (P&S) Finance & Insurance (F&I) ® Franchised Dealerships Franchised Dealerships84 Brands, Luxury Weighted20+ New & hicle Sales Parts & r i (P&S) Finance & Insurance (F&I) Collision Repair Centers14 20 Major Metropolitan Markets Focused On Inventory Mix and
Slide 25: Franchised Dealerships – Geographic Footprint
25 Franchised Dealerships – Geographic Footprint Platforms in Major Metro Markets 84 Stores, 20+ Brands, 14 Collision Repair Centers
Slide 26: Franchised Dealerships – Strategic Levers
26 Franchised Dealerships – Strategic Levers Multiple Growth Drivers Divest Underperforming or Capital-Intensive Stores Grow Parts and Service Maximize F&I Penetration Used Vehicle Volume Throughput Inventory Sourcing Apply EchoPark Learnings Omni-Channel Platform SG&A Expense Discipline Acquire Pot
Slide 27: Omni-Channel Strategy
27 Omni-Channel Strategy
Slide 28: Full Omni-Channel Infrastructure
28 Full Omni-Channel Infrastructure Guest Experience Managers Centralized Appraisals, Inventory Sourcing, Pricing Centralized Call Support Centralized F&I Digital Interface People Proprietary Technology Centralized Marketing Develop & Launch eCommerce Platform B u y & S e l l Yo u r Wa y Proprietary
Slide 29: Buy & Sell Your Way
29 Buy & Sell Your Way • Complete A Traditional Vehicle Purchase Experience With A Modern, Technology- Enabled Approach • Can Be Completed In Under An Hour • Research Online, Utilize Chat, Text, Phone, Zoom To Reduce In-Person Process • Review And Select Insurance Products And Financing Options • In
Slide 30: Q1 2021 Financial Snapshot
30 Q1 2021 Financial Snapshot
Slide 31: Q1 2021 – Consolidated Continuing Operations
31 Q1 2021 – Consolidated Continuing Operations B/(W) than Q1 2020 (In millions, except per share data) Q1 2021 $ % Revenues $2,786.8 $478.7 20.7% Gross profit $400.9 $50.3 14.4% SG&A expenses $289.4 ($7.2) (2.6%) SG&A expenses as % of gross profit 72.2% 830 bps Earnings from continuing operations b
Slide 32: Strong Balance Sheet And Liquidity
32 Strong Balance Sheet And Liquidity March 31, 2021 December 31, 2020 (In Millions) Cash and cash equivalents 77.2$ 170.3$ Availability under the 2016 Revolving Credit Facility 218.8 214.7 Availability under our used vehicle floor plan facilities(1) - - Availability under the 2019 Mortgage Facility
Slide 33: Capital Expenditure Discipline
33 Capital Expenditure Discipline Strict Capital Allocation Strategy Prioritizes Highest Return On Investment Actual YTD Q1 2021 Capital Expenditures Of $67.7 Million FY 2021E Includes Plans For 25 New EchoPark Locations $181.2 $87.8 $89.3 $92.4 $100.0 $53.0 $75.8 $36.3 $34.8 $75.0 FY 2017 FY 2018 F
Slide 34: Appendix
34 Appendix
Slide 35: Non-GAAP Reconciliation – Earnings Per Share
35 Non-GAAP Reconciliation – Earnings Per Share Q1 2021 Q1 2020 (In thousands, except per share amounts) Weighted- Average Shares Amount Per Share Amount Weighted- Average Shares Amount Per Share Amount Diluted earnings (loss) and shares from continuing operations(1) 43,542 53,689$ 1.23$ 42,615 (199
Slide 36: Non-GAAP Reconciliation – Segment Income
36 Non-GAAP Reconciliation – Segment Income Franchised Dealerships Segment EchoPark Segment Consolidated (In millions, except unit data) Q1 2021 Q1 2020 Q1 2021 Q1 2020 Q1 2021 Q1 2020 Revenues 2,279.7$ 1,976.3$ 507.1$ 331.7$ 2,786.8$ 2,308.1$ Gross profit 355.0$ 318.8$ 45.9$ 31.8$ 400.9$ 350.6$ SG&
Slide 37: Non-GAAP Reconciliation – Adjusted EBITDA
37 Non-GAAP Reconciliation – Adjusted EBITDA (In thousands) FY 2017 FY 2018 FY 2019 FY 2020 LTM Q1 2021 Net Income (Loss) 92,983$ 51,650$ 144,137$ (49,349)$ 202,170$ Provision For Income Taxes 13,198 22,645 54,954 12,983 78,870 Income (Loss) Before Taxes 106,181$ 74,295$ 199,091$ (36,366)$ 281,040$
Slide 38: Non-GAAP Reconciliation – Adjusted EBITDA
38 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 54,222 $ (199,333) Provision For Income Taxes 19,051 (44,200) In
Slide 39: Non-GAAP Reconciliation – Adjusted EBITDA
39 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 59,818 $ 29,010 Provision For Income Taxes 20,620 11,307 Income
Slide 40: Non-GAAP Reconciliation – Adjusted EBITDA
40 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ (199,333) $ 42,221 Provision For Income Taxes (44,200) 18,935 In
Slide 41: Non-GAAP Reconciliation – Adjusted EBITDA
41 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 29,010 $ 15,118 Provision For Income Taxes 11,307 7,262 Income (
Slide 42: Non-GAAP Reconciliation – Adjusted EBITDA
42 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 42,221 $ (2,194) Provision For Income Taxes 18,935 (1,910) Incom
Slide 43: Non-GAAP Reconciliation – Adjusted EBITDA
43 Non-GAAP Reconciliation – Adjusted EBITDA Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total Franchised Dealerships Segment EchoPark Segment Discontinued Operations Total (In thousands) Net Income (Loss) $ 15,118 $ 19,440 Provision For Income Taxes 7,262 13,935 Income (
Slide 44: Investor Relations Contacts
® Investor Relations Contacts: Sonic Automotive Inc. (NYSE: SAH) Danny Wieland, Vice President, Investor Relations & Financial Reporting ir@sonicautomotive.com (704) 927-3462 KCSA Strategic Communications David Hanover / Scott Eckstein sonic@kcsa.com (212) 896-1220
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