Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q2 2021 Earnings Presentation
42 slides from Penske Automotive's earnings presentation, Jul 28, 2021
Slide 1: Second Quarter 2021 Financial Results & Update
Second Quarter 2021 Financial Results & Update
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. Actual results may vary materially because of risks
Slide 3: About Penske Automotive
ABOUT PENSKE AUTOMOTIVE A diversified international transportation services company and one 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 VISION Be the mo
Slide 4: Accolades
ACCOLADES 10+ Years Running Since 2018 33 Dealers in 2019 Top 2 in Automotive Retailing, Services Top 5 in Specialty Retail category Including the top 6 ranked stores each year each year 35 Dealers in 2021 CarShop UK – Best Places to Work For 2021 CarShop US – Best Places to Work For 2019 2018 Deale
Slide 5: Investment Highlights
• Diversified portfolio and business mix provides multiple INVESTMENT opportunities for growth • Highly fragmented automotive HIGHLIGHTS and commercial truck retail industries provide multiple opportunities for expansion • Retail automotive segment focused on Premium/Luxury brands which generate mor
Slide 6: Global Reach
GLOBAL REACH Operations across four continents and nine countries • Retail Automotive • U.S., U.K., Germany, Italy, Spain, and Japan • Commercial Trucks • U.S. and Canada • Commercial Vehicles, Power Systems & Parts Distribution • Australia and New Zealand • 28.9% ownership of Penske Transportation
Slide 7: SG&A to Gross Profit
SG&A TO GROSS PROFIT Drove expense leverage of 1,860 basis points in Q2 2021 82.6% 82.0% 77.9% 74.3% 72.7% 69.7% 67.3% 63.4% FY '19 FY '20 Q1 '20 Q2 '20 Q3 '20 Q4 '20 Q1 '21 Q2 '21 Q2 2021 7
Slide 8: Second Quarter 2021 Highlights
SECOND QUARTER 2021 HIGHLIGHTS Q2 2021 8
Slide 9: Second Quarter 2021 Highlights
SECOND QUARTER 2021 HIGHLIGHTS Reported ($ in Millions, except Per Share Amount) Q2 ’21 Q2 ’20 Chg vs ‘20 Income from Cont Ops Before Taxes $463.7 $61.2 +657.7% Income from Cont Ops $338.8 $45.0 +652.9% Earnings Per Share $4.20 $0.56 +650.0% Adjusted* ($ in Millions, except Per Share Amount) Q2 ’21
Slide 10: Q2 2021 Key Takeaways
Q2 2021 KEY TAKEAWAYS Retail Automotive Premier Truck Group Capital Allocation • Retailed over 132,000 new • +34% Same-Store New Unit • Acquired $600 million in and used automotive units Growth annualized revenues • Same-Store Revenue • +36% Same-Store Revenue • Increased dividend (July 21st) increa
Slide 11: Retail Automotive Overview
RETAIL Revenue AUTOMOTIVE 45% 38% OVERVIEW 5% 3% 9% • 323 retail automotive locations worldwide Gross Profit • 304 franchise dealerships 19% 27% • 19 CarShop SuperCenters 2% 32% 20% • 32 Collision Centers • Diversified revenue stream drives profitability New Used S&P F&I F&WH Q2 2021 11
Slide 12: Worldwide Automotive Brand Mix
WORLDWIDE AUTOMOTIVE BRAND MIX (% of Total Automotive Dealership Revenue) (6 Months 2021) 23% • Premium – 71% • U.S. – 1% • Volume Non-U.S. – 22% • CarShop – 6% 12% 11% 10% 9% 7% 7% 6% 4% 3% 3% 2% 1% 1% 1% Other Q2 2021 12
Slide 13: Retail Automotive Key Metrics
RETAIL AUTOMOTIVE KEY METRICS Same-Store Q2 ‘21 Q2 ’20 Chg Volume Metrics New Units (U.S. +78.8%; U.K. +156.2%) 57,622 30,088 +91.5% Used Units (U.S. +42.1%; U.K. +142.8%) 73,270 41,952 +74.7% Total (U.S. +59.5%; U.K. +146.6%) 130,892 72,040 +81.7% Gross Per Unit New $4,770 $3,499 +36.3% Used $2,618
Slide 14: Retail Automotive Revenue
RETAIL AUTOMOTIVE REVENUE Same-Store ($ in Millions) Q2 ’21 Q2 ’20 Chg New Vehicle $2,797.2 $1,365.3 +104.9% Used Vehicle $2,295.6 $1,151.3 +99.4% F&I $209.9 $95.8 +119.1% Service & Parts $543.5 $340.0 +59.9% Fleet & Wholesale $298.6 $159.0 +87.8% Total $6,144.8 $3,111.4 +97.5% Q2 2021 14
Slide 15: Retail Automotive Service & Parts
RETAIL AUTOMOTIVE SERVICE & PARTS $2,400 $1,800 $2,200 $1,600 $2,000 $1,400 $1,800 Gross Profit $1,200 $1,600 Revenue $1,400 $1,000 $1,200 $800 $1,000 $600 $800 $400 $600 $400 $200 2008 2009 2009 2010 2011 2013 2014 2015 2016 2017 2018 2019 2020 6M 6M 2020 2021 Revenue Gross Profit Q2 2021 15
Slide 16: Premier Truck Group Overview
OVERVIEW • Largest Dealership Group for Daimler Trucks N.A. • Retailed over 4,100 new and used commercial trucks in Q2 2021 • 6M 2021 Revenue of $1.1 billion • Service and Parts gross profit provides 65% of total gross profit • Return on sales of 6.3% for 6M 2021 • Completed the acquisition of Kansa
Slide 17: Retail Truck Key Metrics
RETAIL TRUCK KEY METRICS Same-Store Q2 ‘21 Q2 ‘20 Chg Volume Metrics New Units 2,770 2,063 +34.3% Used Units 803 773 +3.9% Gross Per Unit New Vehicle $6,462 $4,640 +39.3% Used Vehicle $12,147 ($3,110) +490.6% F&I $1,792 $1,634 +9.7% Q2 2021 17
Slide 18: CarShop Used SuperCenters
• Operate 19 CarShop used vehicle SuperCenters • Fully digital solution available through www.carshop.com • Retailed 18,742 units in Q2 • U.S. +113% • U.K. +219% CARSHOP USED • Same-Store Variable Gross Profit per Unit +19% to SUPERCENTERS $2,734/unit Q2 2021 18
Slide 19: Growth Plan Goal
• Expected to open six locations GROWTH in 2021 PLAN GOAL • Opened 2 location in first half of 2021 • Expect to open 4 locations in second half of 2021 • Our goal is to increase the number of locations to 40 by the end of 2023 with: • 150,000 in unit sales • $2.5 to $3.0 billion in revenue • Income
Slide 20: Q2 2021 CarShop Performance
Q2 2021 CARSHOP PERFORMANCE Q2 ‘21 Q2 ‘20 Chg. % Used Units Retailed 18,742 6,600 +184% Revenue (in millions) $408 $133 +208% Avg. Transaction Price $18,533 $16,546 +12% Total Variable Gross/Unit $2,701 $2,307 +17% Variable Margin 14.6% 13.9% +70 bps Q2 2021 20
Slide 21: Penske Australia
Distributor of heavy and medium duty trucks, buses and diesel/gas engines and power systems in Australia and New Zealand • Western Star, MAN Truck and Bus, Dennis Eagle • MTU, Detroit Diesel, Allison Transmission, Bergen Onsite Energy, Rolls Royce Power Systems • Parts & service gross profit represe
Slide 22: Penske Transportation Solutions
• Over 330,000 vehicles on the road • Q2 2021 revenue of $2.3B • Q2 2021 income of $358M, or 15.4% return on sales PENSKE • PAG recorded equity income of $102.5M in Q2 2021, TRANSPORTATION +243% SOLUTIONS Q2 2021 22
Slide 23: PTS Performance Summary
PTS PERFORMANCE SUMMARY Q2 Total Revenue 6M Total Revenue ($ in Billions) ($ in Billions) $2,776 $5,291 $2,255 $2,033 $4,390 $4,227 Q2 '19 Q2 '20 Q2 '21 6M '19 6M '20 6M '21 Q2 Income 6M Income ($ in Millions) ($ in Millions) $354 $540 $132 $221 $104 $151 Q2 '19 Q2 '20 Q2 '21 6M '19 6M '20 6M '21 Q2
Slide 24: PTS Contribution to PAG Earnings
PTS CONTRIBUTION TO PAG EARNINGS ($ in millions) $165 $156 $142 $130 $102 $62 $44 2016 2017 2018 2019 2020 6M '20 6M '21 Q2 2021 24
Slide 25: Omni Channel and Digital
OMNI CHANNEL AND DIGITAL Q2 2021 25
Slide 26: Omni-Channel Customer Experience
OMNI-CHANNEL CUSTOMER EXPERIENCE MARKETING PRODUCT Focus on the Customer Vehicles for Every Need DATA ANALYTICS CUSTOMER SUPPORT Listen and Learn Count on Us, Anytime PERSONALIZE CUSTOMIZE CONNECT FLEXIBLE BUYING CUSTOMER SATISFACTION Buy on Your Terms, Online or In- Feedback Matters Store SERVICE I
Slide 27: Leader in Online Reputation
LEADER IN ONLINE REPUTATION (Q2 2021) OUTPERFORMING PEER GROUP ON GOOGLE 88.44% of all U.S. online searches are done through Google* 950 4.65 Q2 Avg. Google Reviews per Store 4.76 Lifetime Avg. Google Star Rating per Store Q2 Avg. Google Star Rating per Store *Source: gs.statcounter.com, June 2020-J
Slide 28: Digital Retailing
DIGITAL RETAILING UNITED STATES UNITED KINGDOM • Preferred Purchase – Franchise Stores • Browse – Buy – Collect • Available for all new and used vehicles • Flexible buying - In-store or online • Flexible buying - In-store, online, or hybrid model hybrid model • £99 Reservation • Transparent and stre
Slide 29: CarShop – 100% Online Buying
CARSHOP – 100% ONLINE BUYING • Digital platform developed by industry leading partnership between Penske and Cox Automotive • 3 easy steps to complete online • Payments customized to each individual across entire inventory • Digital signatures on all paperwork including authoritative finance contrac
Slide 30: Preferred Purchase
PREFERRED PURCHASE • Flexible, convenient car buying • Available on PenskeCars.com and U.S. PAG dealership websites • Includes programs from captive and preferred lenders • 14% of customers use Preferred during their buying Q2 2021 30
Slide 31: U.K. Digital Retailing
U.K. DIGITAL RETAILING • Intuitive mobile and desktop design • Flexible buying - In-store or online hybrid model • £99 Reservation • Multiple Finance Co. Integration • Buy Outright (Credit Card) Q2 2021 31
Slide 32: 6M 2021 Financial Review
6M 2021 FINANCIAL REVIEW Q2 2021 32
Slide 33: 6M 2021 Highlights
6M 2021 HIGHLIGHTS Reported ($ in Millions, except Per Share Amount) 6M ’21 6M ’20 Chg vs ‘20 Revenue $12,761.3 $8,660.2 +47.4% Income from Cont Ops Before Taxes $711.3 $132.7 +436.0% Income from Cont Ops $521.3 $96.6 +439.6% Earnings Per Share $6.46 $1.20 +438.3% Adjusted ($ in Millions, except Per
Slide 34: 6M 2021 Revenue & EBT
6M 2021 REVENUE & EBT Revenue Revenue Earnings Before Tax $12.8 Billion $12.8 Billion $711 Million 9% 60% 32% 90% 8% 66% 2% 25% 8% North America Retail Retail Commercial Other* Automotive Truck United Kingdom Other *Includes equity income from joint venture investments, including Penske Transportati
Slide 35: Cash Flow from Operations
CASH FLOW FROM OPERATIONS ($ In Millions) $1,202 $917 $623 $614 $518 2017 2018 2019 2020 6M 2021 Q2 2021 35
Slide 36: Net Capex
($ In Millions) NET CAPEX $306 $247 $245 $225 $226 $186 $198 Net Capital Expenditures for 6M 2021 $142 were $53 million $91 $53 2017 2018 2019 2020 6M YTD 2021 Gross Net Q2 2021 36
Slide 37: 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 $1,518 $1,500 2 $1,000 1.8x 1 $500 1.0x 0 $0 2017 2018 2019 2020 Jun-21 -$500 Debt Leverage -1 Q2 2021 37
Slide 38: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS Q1 2021 38
Slide 39: Income from Continuing Operations Before Taxes
INCOME FROM CONTINUING OPERATION BEFORE TAXES The following tables reconcile reported income from continuing operations before taxes to adjusted income from continuing operations before taxes for the three months and six months ended June 30, 2021 and 2020: Income From Continuing Operations Before T
Slide 40: Income/EPS from Continuing Operations
INCOME/EPS FROM CONTINUING OPERATIONS The following tables reconcile reported income from continuing operations and earnings per share to adjusted income from continuing operations and adjusted earnings per share for the three months and six months ended June 30, 2021 and 2020: Income From Continuin
Slide 41: EBITDA and Adjusted EBITDA Reconciliation
EBITDA AND ADJUSTED EBITDA RECONCILIATION ($ in Millions) Q2 ’21 Q2 ’20 % Chg 6M ’21 6M ’20 % Chg Net Income $340.4 $44.8 659.8% $523.5 96.3 443.6% Depreciation 30.2 27.9 8.2% 59.5 56.4 5.5% Other Interest 19.7 28.4 (30.6%) 37.6 60.1 (37.4%) Income Taxes 123.4 16.5 647.9% 187.9 36.6 413.4% (Income)/
Slide 42: Investor Relations Contact
Investor Relations Contact: Anthony R. Pordon Executive VP-Investor Relations and Corporate Development Phone: 248-648-2540 Email: tpordon@penskeautomotive.com Penske Automotive Group, Inc. 2555 S. Telegraph Road Bloomfield Hills, MI 48302 www.penskeautomotive.com Q2 2021 42
Penske Automotive Group — Q2 2021 Earnings Presentation on 6ix