Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q4 2021 Earnings Presentation
42 slides from Penske Automotive's earnings presentation, Feb 9, 2022
Slide 1: Fourth Quarter 2021 Financial Results
Fourth Quarter 2021 Financial Results
Slide 2: Disclaimer
Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s liquidity, assessment of business conditions, expected future operating results and growth plans. Statements in this press release may involve forwar
Slide 3: About Penske Automotive
ABOUT PENSKE AUTOMOTIVE A $26 billion diversified international transportation services company and one of the world’s premier automotive and commercial truck retailers MISSION Deliver excellence to our customers, value to our stakeholders, and opportunity to our team members everywhere we operate V
Slide 4: Investment Highlights
• Diversified business mix provides multiple opportunities for growth INVESTMENT • Highly fragmented automotive and commercial truck retail industries HIGHLIGHTS provide multiple opportunities for expansion • Retail automotive segment focused on Premium/Luxury brands which generate more than 70% of
Slide 5: Fourth Quarter 2021 Key Takeaways
FOURTH QUARTER 2021 KEY TAKEAWAYS Q3 2021 32
Slide 6: Fourth Quarter 2021 Highlights
FOURTH QUARTER 2021 HIGHLIGHTS ($ in Millions, except Per Share Amount) Q4 ’21 Q4 ’20 Chg Income from Cont. Ops Before Taxes $420.3 $263.3 +60% Adjusted Income from Cont. Ops Before Taxes* $431.7 $257.5 +68% Income from Cont. Ops $310.4 $200.1 +55% Adjusted Income from Cont. Ops* $320.5 $199.9 +60%
Slide 7: Q4 2021 Key Takeaways
Q4 2021 KEY TAKEAWAYS Retail Automotive Commercial Trucks Capital Allocation • Same-store revenue +4.1% • Retailed 4,459 new & used trucks, +3.1% • Completed acquisitions representing $1.3 billion in revenues • Same-store gross profit +25.6% • Same-store new & used truck sales declined 15.1% • Incre
Slide 8: Retail Automotive
RETAIL AUTOMOTIVE
Slide 9: Retail Automotive Overview
RETAIL Revenue AUTOMOTIVE 44% 38% OVERVIEW 5% 3% 10% • 327 retail automotive locations worldwide Gross Profit • 304 franchise dealerships 27% 17% • 23 CarShop locations 2% 34% 20% • 32 Collision Centers • Diversified revenue stream drives profitability New Used S&P F&I F&WH 9
Slide 10: 2021 Automotive Brand Mix
2021 AUTOMOTIVE BRAND MIX (% of Total Worldwide Automotive Dealership Revenue) • Premium – 71% • U.S. – 1% • Volume Non-U.S. – 21% • CarShop – 7% 24% 12% 11% 10% 8% 7% 7% 7% 4% 3% 3% 1% 1% 1% 1% Other 10
Slide 11: Franchised Dealerships Key Metrics
FRANCHISED DEALERSHIPS KEY METRICS Same-Store Q4 ‘21 Q4 ’20 Chg Volume Metrics New Units (U.S. -17%; U.K. -21%) 41,895 51,674 -19% Used Units (U.S. +3%; U.K. Flat) 55,921 56,395 -1% Total Units 97,816 108,069 -10% Gross Per Unit New $6,832 $4,150 +65% Used $2,913 $1,843 +58% F&I $1,959 $1,474 +33% V
Slide 12: Same-Store Revenue – Q4
SAME-STORE REVENUE – Q4 Q4 ’21 Q4 ’20 Chg New Vehicle $2,260 $2,468 -8% Used Vehicle $2,021 $1,661 +22% F&I $192 $159 +21% Service & Parts $547 $499 +10% Fleet & Wholesale $252 $278 -9% Total $5,272 $5,065 +4% 12
Slide 13: Retail Automotive Service & Parts
RETAIL AUTOMOTIVE SERVICE & PARTS $2,500 $1,600 $2,250 $1,400 $2,000 $1,200 $1,750 $1,000 $1,500 Gross Profit Revenue $1,250 $800 $1,000 $600 $750 $400 $500 $200 $250 $0 $0 2011 2013 2014 2015 2016 2017 2018 2019 2020 2021 Revenue Gross Profit 13
Slide 14: CarShop
• Operate 23 locations across US/UK CARSHOP • Opened 6 new locations in 2021 • South Brunswick (US) • Scottsdale (US) • Express Leicester (UK) • Leighton Buzzard (UK) • Wolverhampton (UK) • Express Halifax (UK) • Goal by the end of 2023: • $2.5 to $3.0 billion in revenue • Income before taxes of app
Slide 15: CarShop Key Metrics
CARSHOP KEY METRICS Q4 ‘21 Q4 ‘20 Chg. % Used Units Retailed 14,815 11,923 +24% Revenue ($ in millions) $394 $245 +61% Avg. Transaction Price $21,953 $16,754 +31% Total Variable Gross/Unit $2,655 $2,325 +14% 15
Slide 16: Commercial Vehicles
COMMERCIAL VEHICLES
Slide 17: Premier Truck Group
• One of the largest PREMIER TRUCK dealership groups for Daimler Trucks N.A. GROUP • Retails new and used Freightliner and Western Star Trucks • 37 locations across North America • Service and parts gross profit provides 59% of total gross profit • 6.5% return on sales • Q4 fixed cost absorption 121
Slide 18: Retail Truck Key Metrics
RETAIL TRUCK KEY METRICS Q4 Q4 Same-Store Chg. 2021 2020 Volume Metrics New Units 2,970 3,254 -9% Used Units 704 1,071 -34% Gross Per Unit New Vehicle $6,993 $4,911 +42% Used Vehicle $19,102 $4,578 +317% F&I $1,253 $925 +35% 18
Slide 19: PTG Performance Summary
PTG PERFORMANCE SUMMARY Q4 Q4 Revenue Revenue ($ in Millions) 12M9M Revenue Revenue ($ in Millions) $688 $2,466 $2,050 $2,061 $599 $579 Q4 '19 Q4 '20 Q4 '21 2019 2020 2021 Q4 EBT ($ in Millions) 12M EBT ($ in Millions) $160 $45 $27 $21 $87 $78 Q4 '19 Q4 '20 Q4 '21 2019 2020 2021 19
Slide 20: Penske Australia
Distributor of heavy and medium duty PENSKE trucks, buses and diesel/gas engines and power systems AUSTRALIA • Western Star, MAN, Dennis Eagle • MTU, Detroit Diesel, Allison Transmission, Bergen Onsite Energy, Rolls Royce Power Systems • Parts & service gross profit over 80% of total gross profit Q4
Slide 21: Penske Transportation Solutions
• Over 360,000 vehicles on the road • Q4 total revenue up 25% to $3.0B • Q4 income $316M up 62% • Return on sales +10.7% PENSKE TRANSPORTATION • PAG recorded equity income of $91M in Q4 2021 SOLUTIONS 21
Slide 22: PTS Performance Summary
PTS PERFORMANCE SUMMARY Q4 Total Revenue 12M Total Revenue ($ in Billions) ($ in Billions) $3.0 $11.2 $2.3 $2.4 $9.0 $8.9 Q4 '19 Q4 '20 Q4 '21 12M '19 12M '20 12M '21 Q4 Income 12M Income ($ in Millions) ($ in Millions) $316 $1,265 $195 $126 $492 $569 Q4 '19 Q4 '20 Q4 '21 12M '19 12M '20 12M '21 22
Slide 23: PTS Earnings Contribution
PTS EARNINGS CONTRIBUTION ($ in millions) $366 $165 $142 $130 $102 $62 2016 2017 2018 2019 2020 2021 23
Slide 24: Omnichannel and Digital
OMNICHANNEL AND DIGITAL Q2 2021 25
Slide 25: Our Omnichannel Marketing
OUR OMNICHANNEL MARKETING MARKETING PRODUCT Focus on the Vehicles for Every Customer Need CUSTOMER DATA ANALYTICS SATISFACTION Listen and Learn Feedback Matters IN-STORE FLEXIBLE BUYING EXPERIENCE Buy on Your Terms, The Personal Touch Online or In-Store CUSTOMER SERVICE RELATIONSHIP Keep Our Custome
Slide 26: Leader in Online Reputation
(Q4 2021) LEADER IN ONLINE REPUTATION PAG continues to lead peer group on Google 88% of all U.S. online searches done through Google in 2021* 1,147 Lifetime Avg. Google Reviews per Store • 94% of the Q4 Google reviews were positive 4 .75 • PAG ranked first among U.S. public dealership groups in the
Slide 27: Digital Sales & Service
DIGITAL SALES & SERVICE Evaluating, expanding and enhancing our digital toolbox to meet the ever-changing needs of our customers throughout their ownership cycle SALES SERVICE PERFORMANCE • Buy Online / Preferred • Online Service Scheduler • Data Analysis Purchase • Vehicle Service Status • Quality
Slide 28: Digital Retailing
DIGITAL RETAILING • Franchise Stores • 100% Online buying • Browse – Buy - Collect • Available for all new and capability • Flexible buying: In- used vehicles • Up-front, personalized store, online, or hybrid • Flexible buying: In- payments across entire • £99 Reservation store, online, or hybrid in
Slide 29: 12M 2021 Financial Review
12M 2021 FINANCIAL REVIEW Q3 2021 32
Slide 30: 12M 2021 Highlights
12M 2021 HIGHLIGHTS ($ in Millions, except Per Share Amount) 12M ’21 12M ’20 Chg vs ‘20 Revenue $25,555 $20,444 +25% Same-Store Revenue $24,875 $20,238 +23% Income from Cont. Ops Before Taxes $1,608 $708 +127% Adjusted Inc from Cont. Ops Before Taxes* $1,636 $711 +130% Income from Cont. Ops $1,187 $
Slide 31: Full Year 2021 Key Takeaways
FULL YEAR 2021 KEY TAKEAWAYS • All-time record revenue, earnings before taxes and net income • Retailed 460,000 new and used vehicles and 16,400 commercial trucks • Acquired Dealership/Open Points of $1.2 billion in annualized revenues • Mercedes-Benz of S. Charlotte; Kansas City Freightliner; Nicol
Slide 32: 12M Revenue & EBT
12M REVENUE & EBT Revenue Revenue Earnings Before Tax $25.6 Billion $25.6 Billion $1.6 Billion 10% 31% 10% 88% 65% 25% 61% 2% 8% Penske North America Retail Retail Commercial Transportation Automotive Truck United Kingdom Solutions* Other *Includes equity income from joint venture investments, inclu
Slide 33: SG&A to Gross Profit
SG&A TO GROSS PROFIT 77.9% 74.3% 66.7% FY '19 FY '20 FY '21 33
Slide 34: Cash Flow from Operations
CASH FLOW FROM OPERATIONS ($ In Millions) $1,298 $1,202 $623 $614 $518 $361 2016 2017 2018 2019 2020 2021 34
Slide 35: 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 2 $1,000 1.8x 1 $500 0.8x 0 $0 2017 2018 2019 2020 2021 -$500 -1 Debt Leverage Refer to non-gaap reconciliation schedule on pages 40 and 41 35
Slide 36: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Q3 2021 38
Slide 37: Income from Continuing Operations Before Taxes
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES The following tables reconcile reported income from continuing operations before taxes to adjusted income from continuing operations before taxes for the three months and twelve months ended December 31, 2021 and 2020: ($ in Millions, except per share a
Slide 38: Income/EPS from Continuing Operations
INCOME/EPS FROM CONTINUING OPERATIONS 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 months and twelve months ended December 31, 2021 and 2020: Income From Co
Slide 39: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION ($ in Millions) Q4 ’21 Q4 ’20 % Chg 12M ’21 12M ’20 % Chg Net Income $312.9 $201.4 +55% $1,192.7 $545.3 +119% Depreciation $31.8 $30.1 +6% $121.5 $115.5 +5% Other Interest $14.8 $21.8 (32%) $68.6 $111.0 (38%) Income Taxes $108.3 $62.0 +75% $416.3 $162.7 +156
Slide 40: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following table reconciles the leverage ratio as of December 31, 2021, 2020 and 2019 ($ in Millions) 12M ‘21 12M ’20 12M ’19 Net Income $1,192.7 $545.3 $435.1 Depreciation $121.5 $115.5 $109.6 Other Interest $68.6 $111.0 $124.2 Income Taxes $416.3 $162.7
Slide 41: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION The following table reconciles the leverage ratio as of December 31, 2017, 2018 and 2019 ($ in Millions) 12M ‘17 12M ’18 12M ’19 Net Income $612.8 $470.3 $435.1 Depreciation $95.1 $103.7 $109.6 Other Interest $107.4 $114.7 $124.2 Income Taxes ($64.8) $134.3
Slide 42: Investor Relations Contact
Anthony R. Pordon Exec. Vice President-Investor Relations and Corporate Development Phone: 248-648-2540 Email: tpordon@penskeautomotive.com Penske Automotive Group, Inc. 2555 S. Telegraph Road INVESTOR RELATIONS Bloomfield Hills, MI 48302 CONTACT 42
Penske Automotive Group — Q4 2021 Earnings Presentation on 6ix