Sonic Automotive, Inc. · NYSE:SAH
Sonic Automotive — Q1 2007 Earnings Presentation
17 slides from Sonic Automotive's earnings presentation, May 1, 2007
Slide 1: Sonic Automotive
Exhibit 99.2
Slide 2: Cautionary Notice Regarding Forward-Looking Statements
Cautionary Notice Regarding Forward-Looking Statements • This presentation contains statements that constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. • These forward-looking statements are n
Slide 3: Sonic Automotive First Quarter 2007 Earnings Review
Sonic Automotive First Quarter 2007 Earnings Review May 1, 2007
Slide 4: The Quarter in Review
The Quarter in Review • Earnings from Continuing Operations up 10.0% • Fixed Operations, Used Vehicles and F&I driving top line and profit improvements • SG&A as a percent of gross profit improved 90 basis points to 77.4% • Operating margin improved 10bps to 3.3%.
Slide 5: Strategy in Motion
Strategy in Motion • Used Vehicle (Champion) process • Standard F&I menu • Fixed Operations • Single DMS • Digital Marketing • Growth through prudent acquisitions • ASI + CSI + MSI = ROI
Slide 6: Financial Performance
Financial Performance (amounts in millions, except per share data) Better/ (Worse) Revenue $1,954 $1,886 $68 Gross Profit $310 $298 $12 Operating Profit – Amount $64 $60 $4 – Margin 3.3% 3.2% Net Income – Continuing Operations $23.7 $21.5 $2.2 – Total Operations 20.0 17.1 2.9 EPS – Continuing Operat
Slide 7: Same Store Revenue Growth
Same Store Revenue Growth • Solid performance across all business segments • Used and F&I processes driving improved performance in both areas • Service Capacity investment contributing to growth 2.1% 5.1% 5.4% 6.3% 3.3% (13.8%) 2.2% New Used Fixed Operations F&I Sub Total Wholesale Total
Slide 8: Used Vehicles: Process in Motion
Used Vehicles Process in Motion Q1 07 Q1 06 Change Champion Stores Used to new ratio 0.53 0.49 0.04 Used retail volume 12,405 11,355 9.2% Total Sonic Used to new ratio 0.53 0.51 0.02 Used retail volume 17,008 16,144 5.4% Memo: Used to New Ratio California 0.33 0.32 0.01 Total Luxury 0.56 0.50 0.06 P
Slide 9: Used Vehicles
Used Vehicles Margin Gross Per Unit Domestic (excl. Cadillac) 11.9% $1,846 Luxury Imports (incl. Cadillac) 8.6% $2,311 Other Imports 12.5% $1,772 Total 10.3% $1,995 Brand Mix - Used Revenue 18.4% 54.1% 27.5% Domestic (excl. Cadillac) Luxury Imports (incl. Cadillac) Other Imports
Slide 10: F&I: Process in Motion
F&I Process in Motion F&I Per Unit $959 $969 $994 $940 $950 $960 $970 $980 $990 $1,000 Q1 2006 Q4 2006 Q1 2007 $35
Slide 11: Fixed Operations
Fixed Operations Process in Motion • Revenue from Fixed Operations reached a sector leading 15.1% of Total Revenue in Q1. • Total Customer Pay revenue grew over 11%; Gross Profit increased nearly 12%. • A total of 102 incremental stalls were added in 2006; 138 more are planned for 2007. Spend money
Slide 12: SG&A Expenses as % of Gross Profit
SG&A Expenses as % of Gross Profit 8.0% 70.3% 69.0% 8.4% Q1 2007 Q1 2006 All Other SG&A Rent 78.3% 77.4% 40 bps 130 bps 87.9% 86.8% Fixed Absorption
Slide 13: Inventory Management
Inventory Management Days Supply Mar-07 Mar-06 Industry New Vehicles Domestic (excluding Cadillac) Luxury (including Cadillac) Other Imports Overall Used Vehicles Parts
Slide 14: Debt to Capital Ratio
Debt to Capital Ratio * 39.4% 38.9% Q1 2007 Q4 2006 50 bps *Net of cash and excludes impact of FIN 48
Slide 15: Portfolio Enrichment
Portfolio Enrichment Percent of Total Revenue 18% 17% 51% 52% 31% 31% Q1 2006 Q1 2007 Domestic Luxury Other Imports 100% 100% Luxury and Import at 83%
Slide 16: Summary
Summary • Execution of key initiatives continues – Used vehicles, fixed operations, and F&I • Executing disciplined and prudent acquisition strategy – targeting 10%-15% of revenue • Strategy is sound; team focused on delivering results • Top priority: Improved profits and cash flow Re-affirming Full
Slide 17: Slide 17