Asbury Automotive Group Inc · NYSE:ABG
Asbury Automotive — Q3 2023 Earnings Presentation
37 slides from Asbury Automotive's earnings presentation, Oct 24, 2023
Slide 1: Third Quarter 2023 Investor Relations Presentation
THIRD QUARTER 2023 INVESTOR RELATIONS PRESENTATION ABG | Asbury Automotive
Slide 2: Forward Looking Statements
This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans, objectives, projections regarding Asbury's fi
Slide 3: Our North Star: Asbury Automotive Group brands and culture
gest CENTRIC Aur re) KAHLO A? Mo, we %, (H clicklane & e 7 x %, &» McDavid & Z STEVINSON = 2 3 ® PLAZA MOTORS | NALEY TEAM MEMBERS AUTOMOTIVE FUN | SUPPORTIVE | THRIVE BOND | CULTURE ARAPAHOE ASBURY AUTOMOTIVE GROUP. OUR NORTH STAR A.LarryH Miller GUESTS Dealerships CARING | LOVE | STRIVE PROFESSION
Slide 4: Our values
Do what you say you’re going to do We hold ourselves and others accountable, act with integrity, communicate with transparency, and are thorough in our approach Raise the bar We drive towards excellence, demonstrate professionalism, exceed expectations, and anticipate the needs of our guests Invest
Slide 5: Our Agenda
Our Agenda October 24, 2023 01 Company Highlights 02 Third Quarter 2023 Review 03 Growth Strategy 04 Appendix 5 NYSE: ABG
Slide 6: Company Highlights
COMPANY HIGHLIGHTS ABG | Asbury Automotive
Slide 7: Company Highlights
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Company Highlights $37.66 Since 2017, Asbury has(1) $15.43B 139% increase in revenue (19% CAGR) $27.29 (2) $12.90 486% increase in Adj EPS (42% CAGR) $9.46 $8.41 $9.84B $6.43 74% increase in new car dealerships $6.87B $7.21B $7.13B $6.46B 155 (2) Adj Op. Cash Flo
Slide 8: Company Highlights
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Company Highlights TOTAL CARE AUTO 1 Integrated F&I Product Provider WA 3 $15 BILLION Total Revenue(1) ID 2 15 21 9 ~300,000 UT CO 6 IN 4 New and Used Vehicles Retailed(2) CA MO VA 12 6 5 1.7x AZ NM 17 SC Adjusted Net Leverage(3,4) 13 GA TX $1.7 BILLION 24 Availa
Slide 9: Attractive Brand Mix
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Attractive Brand Mix A diversified portfolio with the right brands in the right markets (Based on New Vehicle Revenue – YTD 3Q23) Luxury Imports Lexus 10% Toyota 16% Mercedes-Benz 9% Honda 10% Domestic Luxury 28% BMW 3% Hyundai 4% 33% Porsche 2% Nissan 3% Acura 2
Slide 10: The Four Key Components
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX The Four Key Components Diversified business mix provides multiple profit streams (YTD 3Q23) 5% F&I, includes TCA 14% 23% Parts & Service Used 30% New 42% 10% 51% 26% Revenue Gross Profit May not add to 100% due to rounding 10 NYSE: ABG
Slide 11: Recognition of Excellence
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Recognition of Excellence We are committed to our team members and delivering strong experiences with results Recent Achievements • Ranked #18 by Forbes as one of America’s Best Mid-Sized Companies • Named as one of America’s Greatest Workplaces 2023 by Newsweek
Slide 12: Third Quarter 2023
THIRD QUARTER 2023 ABG | Asbury Automotive
Slide 13: Summary
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Summary Q3 2023 Year-Over-Year Revenue Strategic Highlights Total Company(1) Same Store Delivered adjusted EPS of $8.12 and adjusted EBITDA of $280M(4) Total (5%) Flat Sold over 11,600 vehicles via Clicklane, our omnichannel transactional tool, in 3Q23 New Vehicl
Slide 14: Operating Income & Margin Trend
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Operating Income & Margin Trend We have consistently delivered best in class operating efficiency 8.1% 8.3% 8.3% Adj. Operating Margin 7.5% 5.7% $1,274 4.6% Adj. Operating Income ($M) $969 $830 $793 $405 $334 2019 2020 2021 2022 YTD 3Q22 YTD 3Q23 See Appendix for
Slide 15: Cash Flow Summary
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Cash Flow Summary As a larger company with more robust operating cash flow, we have increased capacity for capital deployment Adj. Operating Cash $44.15 Flow per Share $34.84 $31.52 $987 $893 $24.33 $22.93 $782 Anticipated capital 14.63 expenditures of $719 $155
Slide 16: Leverage and Liquidity
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Leverage and Liquidity Deleveraged quickly following large acquisitions, providing opportunity for capital deployment – share repurchases and acquisitions Pro Forma Net Leverage Ratio Total Liquidity ($M) 1.9x $1,723 $1,682 $1,540 $1,589 1.7x 1.7x 1.7x 1.6x $1,17
Slide 17: Leverage Varies Based on Business Conditions & Environment
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Leverage Varies Based on Business Conditions & Environment Equilibrium leverage target range balances financial flexibility with an efficient capital structure 2.5x Normal Target Range 3.0x NET DEBT/EBITDA Factors Influencing Leverage Top ECONOMIC CYCLE Bottom Hi
Slide 18: Capital Allocation History
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Capital Allocation History We have a track record of prudent capital allocation YTD ‘14–’18 2019 2020 2021 2022 3Q23 Acquisitions $835M Revenue Acquired $425M Revenue Acquired $1.8B Revenue Acquired $5.8B(2) Revenue Acquired N/A N/A ▪ Dealerships in ▪ Estes Group
Slide 19: Growth Strategy Update
GROWTH STRATEGY UPDATE ABG | Asbury Automotive
Slide 20: Our Strategy
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Our Strategy Two fundamental principles to drive shareholder value Leverage scale Capital and cost investments in structure existing dealerships Maintain best-in- class operating Acquire dealerships Operational Capital margins through meeting our continuous effic
Slide 21: 2025 Growth Plan
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX In 2025: >$55/Share EPS CAGR of >31%(2) Resulting <1.0x $6.9B ~$32B 2025 Growth Plan Leverage We are working towards achieving our Acquisitions 5-year plan goal of $32 billion in $7.0B revenue by 2025 Clicklane Robust pipeline of 4x We continue to expand our digi
Slide 22: Jim Koons Automotive Companies Overview
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Jim Koons Automotive Companies Overview Revenue per dealership ranked 10th overall in 2022 and 5th in the U.S. for groups with >$2B in Revenue Tysons Toyota Mercedes-Benz of Catonsville 9th LARGEST private dealership group in the U.S. $3B+ of Revenue in 2022 More
Slide 23: Pending Koons Automotive Acquisition - Details
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Pending Koons Automotive Acquisition - Details Subject to OEM approvals and closing terms $740 million of Blue Sky plus fixed assets and inventory $417 million real estate purchase with 18 of 20 locations owned Funding through existing liquidity and capacity unde
Slide 24: Clicklane Statistics & Trends
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Clicklane Statistics & Trends Sequential growth each quarter and potential for increased penetration of new vehicles as SAAR increases Volume per Quarter 10,840 11,444 11,661 11,661 46% $5.2K 3Q23 Volume New Vehicles Total Front-End Yield Retailed +2% increase To
Slide 25: 2025 Plan: Clicklane
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX 2025 Plan: Clicklane Multiple growth drivers deliver significant revenue for Clicklane $8.0B Revenue Expanding Clicklane Future growth drivers Increase Higher Acquisitions SAAR Opportunities Conversion Increase $2.0B As acquisitions are completed, the benefit to
Slide 26: Total Care Auto
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Total Care Auto TCA is a stand-alone insurance company fully integrated with our dealerships that provides a new profit stream and customer retention tool for Asbury Vehicle Sold (Dealership) Vehicle Service Contracts Key & Remote Replacement • Extensive list of
Slide 27: 2025 Plan: Total Care Auto
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX 2025 Plan: Total Care Auto Integrated insurance provider increasing profitability through ownership of the full guest experience $185M+ EBITDA Seasoned and experienced $140M+ management team built for growth Integration with Clicklane provides further opportunity
Slide 28: Appendix
APPENDIX ABG | Asbury Automotive
Slide 29: Online Growth: Parts & Service
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Online Growth: Parts & Service Technology enables productivity and transparency, driving higher $s per repair order 302K Online Service Appointments 111K (2) 3Q18 4Q18 1Q19 2Q19 3Q19 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 1Q23 2Q23 3Q23
Slide 30: Debt Maturity Schedule
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Debt Maturity Schedule Our near-term obligations remain minimal with no significant maturities until 2026 ($ in Millions) $626 Senior Notes $800 Mortgages $600 $405 $445 $168 $33 $90 $73 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Note: As of 9/30/2023; Exc
Slide 31: Non-GAAP Financial Disclosure
In addition to evaluating the financial condition and results of our operations in accordance with GAAP, from time to time management evaluates and analyzes results and any impact on the Company of strategic decisions and actions relating to, among other things, cost reduction, growth, and profitabi
Slide 32: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted income from Operations and Adjusted Operating Margin For the Twelve Months Ended For the Nine Months Ended ($ In millions) December 31, September 30, 2019 2020 2021 2022 2022 2023 Adjusted income from operations: Income from opera
Slide 33: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX For the Three ($ In millions) For the Twelve Months Ended December 31, Months Ended September 30, 2017 2018 2019 2020 2021 2022 2023 Adjusted EBITDA: Non-GAAP Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 1
Slide 34: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX For the Three For the Twelve Months Ended (In millions, except per share data) Months Ended December 31, September 30, 2017 2018 2019 2020 2021 2022 2023 Adjusted net income: Net income $ 139.1 $ 168.0 $ 184.4 $ 254.4 $ 532.4 $ 997.3 $ 169.2 Non-GAAP Non-core ite
Slide 35: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX ($ In millions) For the Twelve Months Ended September 30, December 31, March 31, June 30, September 30, 2022 2022 2023 2023 2023 Adjusted EBITDA: Calculation of earnings before interest, taxes, Non-GAAP depreciation and amortization ("EBITDA"): Net Income $ 784.6
Slide 36: Non-GAAP Reconciliation
HIGHLIGHTS QUARTER 3 GROWTH APPENDIX Non-GAAP Reconciliation Adjusted Cash Flow from Operations, Adjusted Free Cash Flow and Adjusted Operating Cash Flow Per Share For the Nine Months Ended For the Twelve Months Ended (In millions, except per share data) September 30, December 31, December 31, Decem
Slide 37: Thank You
Thank You https://investors.asburyauto.com 37 NYSE: ABG
Asbury Automotive Group — Q3 2023 Earnings Presentation on 6ix