Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q4 2023 Earnings Presentation
40 slides from Penske Automotive's earnings presentation, Feb 7, 2024
Slide 1: Fourth Quarter & Full-Year 2023 Financial Results
FOURTH QUARTER & FULL-YEAR 2023 FINANCIAL RESULTS February 2024
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: PAG Overview
PAG OVERVIEW A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA As of December 31, 2023: 28,000 4 9 employees worldwide continents countries 486,000+ $29.5B new & used units delivered revenue 337 18 (1) automotive franchised CarShop used vehicle dealerships cente
Slide 4: Accolades & Awards
44 Dealers in 2023 Including nine of top 10 and 13 of top 20 in overall rankings and the No. 1 ranked dealership. 14+ Years Running 10+ Years Running Additionally, PAG was recognized for efforts to promote Diversity, Equity & Inclusion 46 Dealers in 2022 Including seven of top 10 and 17 of top 25 in
Slide 5: Retail Automotive Brand Mix
RETAIL AUTOMOTIVE BRAND MIX 71% 21% 1% 7% Premium Volume Non-U.S. U.S. CarShop (Twelve months ended December 31, 2023) 26% (% of Total Worldwide Automotive Dealership Revenue) 13% 11% 9% 8% 7% 7% 7% 5% 3% 2% 1% 1% Other PENSKE AUTOMOTIVE GROUP / 5
Slide 6: Capital Allocation History
CAPITAL ALLOCATION HISTORY 2018 2019 2020 2021 2022 2023 (In Millions) Dividends $121 $131 $68 $143 $154 $189 Cap Ex $306 $245 $186 $249 $283 $375 Share Repurchases $75 $174 $35 $294 $887 $382 Acquisitions $309 $327 --- $432 $393 $215 PENSKE AUTOMOTIVE GROUP / 6
Slide 7: 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 $1,622 $1,629 2.5 $1,500 $1,474 2 $1,000 1.8x 1.5 1 $500 1.0x 0.8x 0.8x 0.5 $- 0 2019 2020 2021 2022 2023 Debt Leverage* *Refer to non-gaap reconciliation on page 37 PENSKE AUTOMOTIVE GROUP / 7
Slide 8: Q4 & 12M 2023 Review
Q4 & 12M 2023 REVIEW
Slide 9: PAG Q4 and 12M YTD Performance Summary
PAG Q4 and 12M YTD PERFORMANCE SUMMARY Q4 Total Revenue Q4 Income From Cont. Ops Q4 Earnings Per Share From ($ in Billions) ($ in Millions) Continuing Operations $7.0 $7.3 $310 $298 $3.97 $4.21 $2.84 $3.45* $6.3 $231* $191 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 Q4 '23 Q4 '21 Q4 '22 Q4 '23 Q4 '23
Slide 10: Key Highlights – Q4
KEY HIGHLIGHTS – Q4 Retail Automotive (2023 vs 2022) Retail Commercial Trucks (2023 vs 2022) Total same-store units delivered (including Agency) Retailed 5,409 new & used trucks, -5%; same-store units -8% increased 9% to 116,652 Same-store revenue -10% Same-store retail automotive revenue pe
Slide 11: Key Highlights – 12M
KEY HIGHLIGHTS – 12M Retail Automotive (2023 vs 2022) Retail Commercial Trucks (2023 vs 2022) Total same-store units delivered (including Agency) Retailed 21,380 new & used trucks, +4%; same-store units +1% increased +7% to 463,709 Same-store revenue +1% Same-store retail automotive revenue
Slide 12: Q4 2023 Global Revenue
28% 63% $7.3 Billion Q4 2023 9% GLOBAL REVENUE North America United Kingdom Other International PENSKE AUTOMOTIVE GROUP / 12
Slide 13: Retail Auto Q4 2023 Revenue
6% 1% 3% 21% 30% 11% REVENUE 48% GROSS PROFIT RETAIL AUTO 8% Q4 2023 32% 40% REVENUE STREAM DRIVES PROFITABILITY New Vehicles Used Vehicles Service & Parts Finance & Insurance Fleet & Wholesale PENSKE AUTOMOTIVE GROUP / 13
Slide 14: Q4 & 12M Performance Highlights
Q4 & 12M PERFORMANCE HIGHLIGHTS ($ in Millions) Q4 ’23 Q4 ’22 Chg 12M ’23 12M ’22 Chg Revenue $7,272 $7,012 +4% $29,527 $27,815 +6% Excl F/X $7,142 +2% $29,531 +6% Retail Auto Same-Store Revenue $6,127 $5,877 +4% $24,256 $23,000 +5% Excl F/X $5,995 +2% $24,236 +5% Inc. from Cont. Ops Before Taxes $2
Slide 15: Retail Automotive
TOYOTA CENTRAL FLORIDA RETAIL AUTOMOTIVE
Slide 16: Retail Automotive Key Metrics
RETAIL AUTOMOTIVE KEY METRICS Same-Store Q4 ’23 Q4 ’22 Chg 12M ’23 12M ’22 Chg VOLUME METRICS New Units* 51,510 50,221 +3% 191,039 179,703 +6% Used Units 57,029 57,076 --- 245,107 252,458 -3% Agency Units 8,113 --- nm 27,563 --- nm Total Units 116,652 107,297 +9% 463,709 432,161 +7% GROSS PER UNIT*
Slide 17: Retail Automotive Same-Store Revenue
RETAIL AUTOMOTIVE SAME-STORE REVENUE ($ in Millions) Q4 ’23 Q4 ’22 Chg 12M ’23 12M ’22 Chg New Vehicle $2,969 $2,760 +8% $10,947 $9,766 +12% Excl F/X $2,918 +6% $10,925 +12% Used Vehicle $1,952 $1,971 (1%) $8,529 $8,742 (2%) Excl F/X $1,895 (4%) $8,518 (3%) Finance & Insurance $207 $200 +3% $812 $82
Slide 18: CarShop Used Vehicles
CARSHOP USED VEHICLES
Slide 19: CarShop Performance Summary
PERFORMANCE SUMMARY Q4 Units Q4 Revenue (in Millions) Q4 Gross/Unit 14,815 $394 $2,655 14,318 14,028 $353 $2,095 $336 $1,938 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 12M Units 12M Revenue ($ in Millions) 12M Gross/Unit 71,242 69,605 $1,776 $2,592 63,403 $1,726 $2,108 $2,009 $1,
Slide 20: Premier Truck Group
PREMIER TRUCK GROUP Amarillo, Texas Facility Opened January 2024
Slide 21: Premier Truck Group
One of the largest dealership groups for Daimler Trucks N.A. Retails new and used Freightliner and Western Star Trucks Acquired Transolutions Truck Centres in the greater Winnipeg, Manitoba market area with 5 locations and $180 million in expected annualized revenue 44 locations across North
Slide 22: Retail Commercial Truck Key Metrics
RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q4 ’23 Q4 ’22 Chg 12M ‘23 12M ‘22 Chg VOLUME METRICS New Units 4,344 5,181 -16% 16,988 17,220 -1% Used Units 885 523 +69% 3,046 2,630 +16% Total Units 5,229 5,704 -8% 20,034 19,850 +1% GROSS PER UNIT New $8,250 $6,663 +24% $7,877 $7,018 +12% Used $6,306
Slide 23: Retail Commercial Truck Performance
RETAIL COMMERCIAL TRUCK PERFORMANCE Q4 Units Q4 Revenue (in Millions) Q4 EBT ($ in Millions) 5,704 $961 $905 5,409 $45 $51 $51 4,459 $688 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 12M Units 12M Revenue ($ in Millions) 12M EBT ($ in Millions) 20,601 21,380 $3,541 $3,684 $215 $225
Slide 24: Penske Australia & New Zealand
PENSKE AUSTRALIA & NEW ZEALAND
Slide 25: Penske Australia/New Zealand
PENSKE AUSTRALIA/NEW ZEALAND Exclusive importer and distributor of certain heavy/medium-duty trucks, buses and refuse collection vehicles – Western Star, MAN, Dennis Eagle Distributor of diesel/gas engines and power systems – MTU, Detroit Diesel, Allison Transmission, and Bergen engines Parts
Slide 26: Penske Transportation Solutions
PENSKE TRANSPORTATION SOLUTIONS
Slide 27: Penske Transportation Solutions (PTS)
PENSKE TRANSPORTATION SOLUTIONS (PTS) PENSKE AUTOMOTIVE GROUP / 27
Slide 28: PTS Highlights
PTS HIGHLIGHTS Managed fleet of over 439,000 trucks, tractors and trailers OPERATING REVENUE (For the three months ended December 31, 2023) Q4 2023 Highlights: Operating revenue of $2.7 billion, up 3% Logistics Net income of $177 million, down 49% 28% Return on sales 6% 47% Full-Service Le
Slide 29: PTS Performance Summary
PTS PERFORMANCE SUMMARY Operating Revenue ($ in Millions) Net Income ($ in Millions) $2,387 $2,656 $2,738 $344 $316 $177 Q4 '21 Q4 '22 Q4 '23 Q4 '21 Q4 '22 Q4 '23 $10,239 $10,809 $1,694 $9,047 $1,265 $1,001 12M '21 12M '22 12M '23 12M '21 12M '22 12M '23 PENSKE AUTOMOTIVE GROUP / 29
Slide 30: PTS Fleet Growth
PTS FLEET GROWTH Managed fleet consists of trucks, tractors and trailers under lease, rental and/or maintenance contracts (Units in Thousands, as of December 31) 439 416 360 327 327 297 271 247 231 215 205 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 PENSKE AUTOMOTIVE GROUP / 30
Slide 31: Omni Channel & Digital
OMNI CHANNEL & DIGITAL
Slide 32: Spectrum of Retail Operations
SPECTRUM OF RETAIL OPERATIONS 100% Online 100% In-Store End-to-End Platform OEM Programs Digital Retailing In-Store CarShop USA OEM powered solutions Enabling customers to In-person transaction at for brand integration shop how they choose the dealership Benefit from OEM Integrated end-to-end market
Slide 33: Digital Retailing to Modern Retailing
DIGITAL RETAILING TO MODERN RETAILING Evolved from a web tool to an integrated digital engagement platform Parallel technology to flow from online to in-store Data follows customer from web to showroom Leverage the same system if the customer starts in store Working deal alongside of custo
Slide 34: Digitizing Sales and Service
DIGITIZING SALES AND SERVICE SALES SERVICE Hybrid Purchase Process Through Dealer Websites AI Service Scheduling Immersive Chat and Text Immersive Chat and Text (AI to human-powered) (AI to human-powered) Virtual Test Drives and Photo Vehicle Walkarounds Estimating Trade/Sell Valuations Vehicle Stat
Slide 35: Non-GAAP Reconciliations
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Slide 36: Consolidated Non-GAAP Reconciliations
CONSOLIDATED NON-GAAP RECONCILIATIONS The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three and twelve months ended December 31, 2023 and 2022 ($ in millions, except
Slide 37: EBITDA & Adj. EBITDA Reconciliation
EBITDA & ADJ. EBITDA RECONCILIATION The following tables reconcile reported net income to earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and adjusted EBITDA for the three months ended December 31, 2023 and 2022 Three Months Ended Change December 31, 2023 vs 2022 ($ in Mil
Slide 38: 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, 2023, 2022, 2021 and 2020 ($ in Millions) 12M ‘23 12M ‘22 12M ’21 12M ’20 12M ‘19 Net Income $1,058.6 $1,386.2 $1,192.7 $545.3 $435.1 Add: Depreciation $141.0
Slide 39: Agency
Beginning in 2023, we transitioned our Mercedes-Benz U.K. dealerships, and a limited number of our other 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
Slide 40: Automotive
Automotive
Penske Automotive Group — Q4 2023 Earnings Presentation on 6ix