Penske Automotive Group, Inc. · NYSE:PAG

Penske Automotive — Q2 2024 Earnings Presentation

40 slides from Penske Automotive's earnings presentation, Jul 31, 2024

  1. Slide 1: Q2 and 6M 2024 Financial Results

    Q2 and 6M 2024 FINANCIAL RESULTS July 2024

  2. 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

  3. Slide 3: A Diversified Transportation Services Company

    A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA For the Six Months Ended June 30, 2024: 28,887 4 9 employees worldwide continents countries 253,517 $15.1B new & used units delivered revenue 362* 18* automotive franchised used vehicle dealerships centers 48* 21

  4. Slide 4: Accolades and Awards

    ACCOLADES AND AWARDS  PAG – Best Retailer to Work For 2024  CarShop UK – Best Places to Work For 2021  CarShop US – Best Places to Work For 2019  Sytner Group – Best Retailer To Work For 2019 35 46 44 80 Dealers Dealers Dealers Dealers in 2021 in 2022 in 2023 in 2024 PENSKE AUTOMOTIVE GROUP / 4

  5. Slide 5: Retail Automotive Brand Mix

    RETAIL AUTOMOTIVE BRAND MIX 72% 21% 1% 6% Premium Volume Non-U.S. U.S. Used Only (For the Six Months Ended June 30, 2024) 26% (% of Total Worldwide Automotive Dealership Revenue) 14% 10% 9% 8% 8% 6% 6% 6% 3% 2% 1% 1% Used Other Only PENSKE AUTOMOTIVE GROUP / 5

  6. Slide 6: PAG Capital Allocation

    PAG CAPITAL ALLOCATION (In Millions) 2019 2020 2021 2022 2023 2024* Dividends $131 $68 $143 $154 $189 $123 Cap Ex $245 $186 $249 $283 $375 $202 Share Repurchases $174 $35 $294 $887 $382 $76 Acquisitions (including $327 --- $432 $393 $215 $441 repayment of seller’s floorplan notes) Total $877 $289 $1

  7. Slide 7: PAG Historical Long-Term Debt and Leverage

    PAG HISTORICAL LONG-TERM DEBT AND LEVERAGE (USD in Millions) $2,500 $2,360 3.5 3 $1,766 $2,000 2.9x $1,690 $1,622 $1,629 2.5 $1,500 $1,474 2 $1,000 1.8x 1.5 1.2x 1 $500 1.0x 0.8x 0.8x 0.5 $- 0 2019 2020 2021 2022 2023 June '24 Debt Leverage Note: Refer to Non-GAAP Reconciliation Section PENSKE AUTOM

  8. Slide 8: Q2 & 6M 2024 Review

    Q2 & 6M 2024 REVIEW

  9. Slide 9: PAG Highlights – 6M 2024

    PAG HIGHLIGHTS – 6M 2024  Year to Date acquired $2.0 billion in estimated annualized revenue  Rybrook U.K. – 16 dealerships: BMW/MINI, Land Rover, Porsche, Volvo  Nantucket Ford and Chrysler Dodge Jeep Ram  Australia – Two Porsche dealerships and a used only center in Melbourne, Australia  Rive

  10. Slide 10: PAG Performance Summary

    PAG PERFORMANCE SUMMARY Q2 Total Revenue Q2 Net Income Attributable to Q2 Income Per Share ($ in Billions) Common Stockholders ($ in Millions) $7.5 $7.7 $4.93 $374 $4.41 $6.9 $301 $3.61 $241 Q2 '22 Q2 '23 Q2 '24 Q2 '22 Q2 '23 Q2 '24 Q2 '22 Q2 '23 Q2 '24 6M Total Revenue 6M Net Income Attributable to

  11. Slide 11: Q2 & 6M Performance Highlights

    Q2 & 6M PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q2 ‘24 Q2 ‘23 CHG 6M ’24 6M ‘23 CHG Revenue $7,697 $7,469 +3% $15,145 $14,808 +2% Excl F/X $7,697 +3% $15,047 +2% Retail Auto Same-Store Revenue $6,315 $6,349 -1% $12,508 $12,582 -1% Excl F/X $6,311 -1% $12,410 -1% Income Before

  12. Slide 12: Retail Automotive

    RETAIL AUTOMOTIVE

  13. Slide 13: Retail Auto Diversified Revenue

    (For the three months ended June 30, 2024) 6% 2% 3% 19% 27% 11% 45% GROSS REVENUE PROFIT RETAIL AUTO 11% DIVERSIFIED REVENUE 35% 41% STREAM New Vehicles Used Vehicles Service & Parts Finance & Insurance Fleet & Wholesale PENSKE AUTOMOTIVE GROUP / 13

  14. Slide 14: Retail Automotive Same-Store Revenue

    RETAIL AUTOMOTIVE SAME-STORE REVENUE ($ in Millions) Q2 ’24 Q2 ’23 CHG 6M ’24 6M ’23 CHG New Vehicle $2,872 $2,819 +2% $5,560 $5,538 --- Used Vehicle $2,157 $2,284 -6% $4,373 $4,530 -4% F&I $203 $212 -4% $403 $416 -3% Service & Parts $717 $683 +5% $1,431 $1,363 +5% Fleet & Wholesale $367 $351 +4% $7

  15. Slide 15: Retail Automotive Key Metrics

    RETAIL AUTOMOTIVE KEY METRICS Same-Store Q2 ’24 Q2 ’23 Chg 6M ’24 6M ’23 Chg VOLUME METRICS New Units* 48,923 49,507 -1% 95,730 97,073 -1% Used Units 62,230 63,233 -2% 127,851 128,583 -1% Total 111,153 112,740 -1% 223,581 225,656 -1% Agency Units 9,333 8,918 +5% 17,861 15,811 +13% Total Units 120,48

  16. Slide 16: Retail Commercial Trucks

    TRUCK GROUP RETAIL COMMERCIAL TRUCKS

  17. Slide 17: North American Locations

    NORTH AMERICAN LOCATIONS  One of the largest dealership groups for Freightliner North America  36 full sales and service facilities  4 Premier Finance centers (within PTS)  9 stand-alone service and parts facilities  2 stand-alone parts facilities  12 collision centers (2 stand alone) PENSKE A

  18. Slide 18: Retail Commercial Trucks Revenue Mix

    (For the three months ended June 30, 2024) 2% 1%1% 3% 24% 27% RETAIL REVENUE GROSS PROFIT COMMERCIAL 5% 69% 3% TRUCKS 65% DIVERSIFIED REVENUE STREAM New Vehicles Used Vehicles Service & Parts Finance & Insurance Fleet & Wholesale PENSKE AUTOMOTIVE GROUP / 18

  19. Slide 19: Performance Summary – Retail Commercial Trucks

    PERFORMANCE SUMMARY – RETAIL COMMERCIAL TRUCKS (For the three months and six months ended June 30, 2024) Q2 Units Q2 Revenue Q2 Earnings Before Taxes ($ in Millions) 5,243 5,248 $919 $892 $52 $56 $52 4,174 $769 Q2 '22 Q2 '23 Q2 '24 Q2 '22 Q2 '23 Q2 '24 Q2 '22 Q2 '23 Q2 '24 6M Units 6M Revenue 6M Ear

  20. Slide 20: Retail Commercial Truck Key Metrics

    RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q2 ’24 Q2 ’23 Chg 6M ‘24 6M ‘23 Chg VOLUME METRICS New Units 4,275 4,510 -5% 7,637 9,027 -15% Used Units 739 701 +5% 1,763 1,356 +30% TOTAL 5,014 5,211 -4% 9,400 10,383 -10% GROSS PER UNIT New $8,684 $8,211 +6% $9,110 $7,700 +18% Used $5,140 $5,733 -10%

  21. Slide 21: Australia/New Zealand

    AUSTRALIA/ NEW ZEALAND

  22. Slide 22: Penske Australia & New Zealand

    PENSKE AUSTRALIA & NEW ZEALAND PENSKE TRANSPORTATION GROUP INTERNATIONAL AUD$1.4+ Billion in 21 Retail & Branch Locations Estimated Annualized 1,400+ Employees Revenue COMMERCIAL VEHICLES TRUCK RENTAL & RETAIL AUTOMOTIVE AND POWER SYSTEMS LOGISTICS  MAN Truck  MTU, Bergen  Commercial Rental  Por

  23. Slide 23: Commercial Vehicle and Power Systems

     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 and Bergen engines and Allison Transmission COMMERCIAL  Parts & service gross

  24. Slide 24: Penske Automotive Australia

    PENSKE AUTOMOTIVE AUSTRALIA  Acquired Porsche Centre Doncaster & Brighton  $130 million estimated annualized acquired revenue PENSKE AUTOMOTIVE GROUP / 24

  25. Slide 25: Penske Transportation Solutions

    PENSKE TRANSPORTATION SOLUTIONS

  26. Slide 26: Penske Transportation Solutions (PTS)

    PENSKE TRANSPORTATION SOLUTIONS (PTS) PENSKE AUTOMOTIVE GROUP / 26

  27. Slide 27: PTS Highlights

    PTS HIGHLIGHTS OPERATING REVENUE (For the three months and six months ended June 30, 2024)  PAG equity earnings of $52.9 million for the three months ended June 30, 2024 50%  Managed fleet of over 446,000 trucks, tractors and trailers 28% Q2 2024  Sequential improvement in the net income from $11

  28. Slide 28: PTS Performance Summary

    PTS PERFORMANCE SUMMARY (For the three months and six months ended June 30, 2024) PAG Equity Income of $85 Million 6M 2024 Year-To-Date Total Revenue Net Income Attributable to ($ in Billions) Common Stockholders ($ in Millions) $500 $450 $400 $350 $300 $2.8 $250 $472 $2.5 $2.7 $200 $253 $150 $100 $

  29. Slide 29: PTS Fleet

    PTS FLEET Managed fleet consists of trucks, tractors and trailers under lease, rental and/or maintenance contracts (Units in Thousands) 439 446* 416 360 327 327 297 271 247 231 215 205 201 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 (*As of June 30, 2024) PENSKE AUTOMOTIVE GROUP

  30. Slide 30: Integrated Marketing Strategy

    INTEGRATED MARKETING STRATEGY

  31. Slide 31: Digital Tools Enhance Experience

    DIGITAL TOOLS ENHANCE EXPERIENCE AI Integrated Virtual Sales/Service Digital Test Drives Technology Retailing DIGITAL CUSTOMER Photo Collision Immersive Sales and TOUCHPOINTS Estimates Chat and Text Service Videos Remote Data Driven Personalization Signing AI Marketing PENSKE AUTOMOTIVE GROUP / 31

  32. Slide 32: Customers in the Driver's Seat

    CUSTOMERS IN THE DRIVER’S SEAT Customers control the process with the ability to seamlessly leverage tools in-store and online End-to-End A fully integrated end-to-end digital transaction system to execute online orders Platform OEM Implement OEM powered solutions to leverage multichannel marketing,

  33. Slide 33: Integrated Digital Retailing

    INTEGRATED DIGITAL RETAILING  Digital retailing tools are integrated and embedded in the business  Leverage same technology, online and in-store  Customer moves seamlessly during the purchase process  Shift workflows to follow customer with how they want to purchase  Technology provides transpa

  34. Slide 34: AI Initiatives and Strategy

    AI INITIATIVES AND STRATEGY  Use of Artificial Intelligence in reception, sales and service to improve efficiency and productivity  Enhance customer experience with personalized, tailored responses and recommendations  Continuous learning from our world-class customer interactions to improve resp

  35. Slide 35: Non-GAAP Reconciliations

    NON-GAAP RECONCILIATIONS

  36. Slide 36: EBITDA Reconciliation

    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 and six months ended June 30, 2024 and 2023 Three Months Ended June 30, Change 2024 vs 2023 ($ in Millions)

  37. Slide 37: EBITDA & Leverage Ratio Reconciliation

    EBITDA & LEVERAGE RATIO RECONCILIATION ($ in Millions) Six Months Six Months Trailing Ended Ended Twelve Months December 31, 2023 June 30, 2024 June 30, 2024 Net Income $456.4 $459.1 $915.5 Add: Depreciation $73.0 $76.4 $149.4 Add: Other Interest $47.6 $41.2 $88.8 Add: Income Taxes $155.9 $161.2 $31

  38. 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, 2020 and 2019 ($ 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 $

  39. Slide 39: Agency

    Beginning in 2023, we transitioned some of our dealerships in the U.K. and Europe 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 under this agency model are counted

  40. Slide 40: Automotive

    Automotive

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