Asbury Automotive Group Inc · NYSE:ABG

Asbury Automotive — Q1 2022 Earnings Presentation

40 slides from Asbury Automotive's earnings presentation, Apr 28, 2022

  1. Slide 1: Asbury Automotive Group Q1 2022

    ™ ™ 1 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved. © Asbury Automotive Group 2022. All rights reserved.

  2. Slide 2: Forward Looking Statements

    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, proj

  3. Slide 3: Our North Star

    ™ Our North Star To be the most Guest-Centric automotive retailer 3 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  4. Slide 4: Company overview and financial highlights

    ™ NYSE: ABG FORTUNE 500 >$15B 5th LARGEST (5) AUTOMOTIVE RETAILER TOTAL REVENUE (1) AUTOMOTIVE RETAILER Closed acquisitions totaling $5.8B in annualized revenue, net of divestitures, in 2021 WA (1) ID (3) FINANCIAL HIGHLIGHTS (4) Boise REVENUE ADJ EBITDA ADJ EPS IN ($MM) ($MM) (ABG: 8, Salt Lake Cit

  5. Slide 5: Attractive Brand Mix

    Attractive Brand Mix ™ (Based on New Vehicle Revenue – Q1 2022) 5% 10% 8% 7% 3% 2% 17% Domestic Luxury 1% 30% 29% 1% 1% Import 4% 41% 4% 4% 18% 5% 10% A diversified portfolio with the right brands in the right markets 5 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  6. Slide 6: The Four Key Components of Our Business

    The Four Key Components of Our Business ™ (Q1 2022) 5% 13% 24% F&I 35% Parts & Service 35% Used New 13% 47% 28% Revenue Gross Profit Diversified business mix provides multiple profit streams that are independent of SAAR 6 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  7. Slide 7: Our Strategy

    Our Strategy ™ Leverage scale Capital and cost investments in structure existing dealerships Maintain best-in- class operating margins through Acquire dealerships continuous efficiency meeting our improvements investment criteria Operational Capital Excellence Deployment Shareholder Provide an Repay

  8. Slide 8: Transformative Acquisition Growth

    ™ Transformative Acquisition Growth Acquired dealerships represent a strong portfolio of assets with a long history of operational excellence 1 and valuable brands 2 Meaningfully increase Asbury’s scale and creates one of the largest US automotive retailers based on sales 3 Enhance Asbury’s presence

  9. Slide 9: A Digital Experience

    ™ A Digital Experience Buying Buy a car 100% online. Finance, Buying trade, protect and sign all online CAR Schedule service appointments OWNERSHIP Owning or accessorize your ride through the My Clicklane portal Get an official offer for your car Selling 100% online within seconds Clicklane provides

  10. Slide 10: Key Clicklane Statistics

    ™ Key Clicklane Statistics 5.6K Actual Volume Total Front- Avg Minutes / end Yield $6.1K Q1 2022 Actual Volume 13.6 Financed Deals $3,804 Variable Financed deals averaged $2,291 F&I 13.6 minutes to complete online % New Cars 38% 8.5 Avg Minutes / 38% of vehicles sold are new cars 90% Cash Deals Cash

  11. Slide 11: TCA Offerings

    TCA Offerings ™ Vehicle Sold (Dealership) Service Drives F&I TCA F&I Products Sold Product Sold (Dealership (Dealership and TCA) TCA and TCA) Life Cycle Repair Work Claims Paid (Dealership) (TCA) Key Offerings Vehicle service  Extensive list of vehicle parts and systems Key & remote  24 hour emerg

  12. Slide 12: 2025 Strategic Growth Plan

    ™ 2025 Strategic Growth Plan 12 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  13. Slide 13: Multiple Potential Drivers of Growth: 2025 Plan

    Multiple Potential Drivers of Growth: 2025 Plan(1) ™ Our plan is to drive revenue growth and profitability through focused, disciplined execution and $20B $5B opportunistic capital allocation Acquisitions $5B Clicklane $2B $8B Same Store 2020 2025 (2) Our original plan was launched in December 2020

  14. Slide 14: 2025 Plan: Progress 2020 to 2021

    ™ 2025 Plan: Progress 2020 to 2021  Exceeded original acquisition growth target with almost $6B in annualized revenue acquired in first year of plan through $15.3B high quality strategic acquisitions $5.8B(2)  Successfully launched Clicklane in legacy Asbury stores Acquisitions, net $0.6B Clicklan

  15. Slide 15: 2025 Plan: Update

    ™ 2025 Plan: Update  Deliver growth through same store, Clicklane and acquisitions, $6.2B ~$32B resulting in 2025:  Revenue of $32 billion Acquisitions  EPS of $55+/ share(2) $7.4B  Leverage of less than 1.0x Clicklane  Free cash flow of $1.2B  Store count of 225+/- $3.1B Disciplined $7.3B $15

  16. Slide 16: Digitization to Enhance our Guest Experience

    ™ Digitization to Enhance our Guest Experience  One of very few Fully Autonomous Online Buying Ecosystems in Industry  Seamless & Fully Autonomous Consumer Acquisition Portal  One of only a few Real-Time Trade Value Algorithms w/Real Time Ownership Payoff from 130 Banks  The Only F&I Experience

  17. Slide 17: 2025 Plan: Same Store – 2022-2025

    ™ 2025 Plan: Same Store – 2022-2025 $3B  New vehicles and related F&I  SAAR growth from 15 million in 2021 to ~17 million in 2025 (2/3) SAAR growth &  Cost of sales inflation on legacy Asbury and acquisitions (app. cost of sales 3% per year) offset the decline to normalized margins (1/3) inflatio

  18. Slide 18: 2025 Plan: Parts and Service

    ™ 2025 Plan: Parts and Service  Focus on technology to drive employee Digitizing In-Store Service Guest Experience productivity  Digital is driving business growth and enhancing the customer experience leading to higher conversion rates and higher returns to our shareholders  Text video inspectio

  19. Slide 19: 2025 Plan: Used Vehicles Retail Units

    ™ 2025 Plan: Used Vehicles Retail Units  Continue to grow used vehicles through:  Proprietary software utilized for strategic inventory management 340K+ resulting in faster turns and higher margins  Clicklane has proven to be a fast, transparent, and convenient online transactional tool  Clickla

  20. Slide 20: 2025 Plan: Clicklane Units

    ™ 2025 Plan: Clicklane Units Same Store + SS + Acqs + Acquisitions Clicklane Clicklane 200k units Dealerships (1) 91 148(1) ~225 Units/store/mo 166(1) 180(1) 261 SAAR adjusted 206(2) Clicklane’s higher conversion rates expand Asbury’s market share (1) Pro forma for all acquisitions and divestitures

  21. Slide 21: 2025 Plan: Clicklane

    ™ 2025 Plan: Clicklane  Industry-leading Guest Centric online ownership program extends the reach of our preowned efforts into untapped markets Front end yield(1) SS Clicklane New $5,750 $5,273 Used 2,228 2,351 F&I 2,376 2,291 Used:New Ratio 114% 163%  Guest-centric model allows Gross Profit PVR o

  22. Slide 22: 2025 Plan: Acquisitions

    2025 Plan: Acquisitions ™ (Annualized Revenue $ Acquired) $5.8B(1) $6B With a disciplined approach, we opportunistically seek acquisitions in the right markets, with the right brands, with the right people, that are accretive to our business $1,825M $425M $220M $150M 2017 2018 2019 2020 2021 2022-20

  23. Slide 23: 2025 Plan: TCA, F&I Product Provider

    ™ 2025 Plan: TCA, F&I Product Provider  Roll out of TCA’s products to full Asbury platform of dealerships, $185M new and used, provides larger scale for TCA business EBITDA  Increased income per contract  Enhanced F&I penetration and service retention $50M EBITDA LHM 2021 2025 Dealerships (1) 61(

  24. Slide 24: 2025 Plan: Growth Targets

    ™ 2025 Plan: Growth Targets  With our strategic acquisitions in 2021 expanding our dealership footprint coast to coast and doubling our size in revenue and earnings, Asbury has a larger base to scale and grow Same Store and Clicklane and increase free cash flow for future capital deployment  Rollo

  25. Slide 25: EPS Growth with Capital Deployment

    ™ Low Leverage Provides Opportunity for Future Capital Deployment  Deployment Priorities to Build Shareholder return  De-lever EPS Growth with  Organic reinvestment Capital Deployment  Accretive M&A  Share repurchases $70+ $6.0B $55+ $3.0B $3.0B $14.40(1) FCF generated Cash from additional Tota

  26. Slide 26: First Quarter 2022 Overview

    ™ First Quarter 2022 Overview 26 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  27. Slide 27: Summary: Q1 2022 Year-Over-Year Growth

    Summary: Q1 2022 Year-Over-Year Growth ™ All Store Same Store Revenue Gross Profit Revenue Gross Profit Total 78% 107% 5% 23% New Vehicle 61% 197% (10%) 67% Used Vehicle Retail 100% 102% 32% 17% Finance and Insurance 130% 118% 26% 26% Parts and Service 92% 70% 14% 10%  Strategic Highlights:  Compl

  28. Slide 28: Operating Income and Margin Trend

    Operating Income and Margin Trend ™ 8.1% 8.2% Adj. Operating Margin 6.2% 5.7% $793 4.6% 4.6% 4.6% Adj. Operating Income ($M) $405 $314 $334 $321 $294 $136 2017 2018 2019 2020 2021 1Q 2021 1Q 2022 We consistently deliver best in class operating efficiency Note: See Appendix for Non-GAAP reconciliatio

  29. Slide 29: Cash Flow Summary

    Cash Flow Summary ™ ($ in Millions, except per share amounts) Adj. Operating Cash $31.43 Flow per Share $22.93 $17.71 $14.63 $7.45 $632 $5.05 $556 $443 $406 $396 $385 $282 $225 $151 $111 $116 $104 2018 2019 2020 2021 1Q 2021 1Q 2022 Adj. Operating Cash Flow Adj. Free Cash Flow We generated more adju

  30. Slide 30: Appendix

    ™ Appendix 30 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  31. Slide 31: Online Service Appointments

    Online Service Appointments ™ Increasing the use of online service appointments creates higher customer retention and increased 176K revenue per repair order 149K 144K 142K 140K 137K 131K 128K 128K 122K 121K 120K 114K 111K 102K 101K 94K 92K 83K 70K 57K 40K 34K 28K 25K Q2'16 Q4'16 Q2'17 Q4'17 Q2'18 Q

  32. Slide 32: Leverage Varies Based on Business Conditions and Environment

    Leverage Varies Based on Business Conditions and Environment ™ 2.5x Normal Target Range 3.0x Net Debt / EBITDA Factors Influencing Leverage Top Economic Cycle Bottom High Macro Economic Risks Low Anticipated Investment Opportunities Executed High Equity Valuation Multiple Low Unfavorable Debt Struct

  33. Slide 33: Capital Allocation History

    Capital Allocation History ™ Acquisitions $150M Revenue Acquired $220M Revenue Acquired $425M Revenue Acquired $1.8B Revenue Acquired $6.6B $5.8B (2) Revenue Acquired  Hare Chevrolet/Isuzu  Terry Lee Honda –  Estes Group and  Elway CDJR –  LHM & TCA – 7 States - Indiana Indiana Butler Toyota –

  34. Slide 34: Debt Maturity Schedule

    ™ Debt Maturity Schedule ($ in Millions) Our near-term obligations remain minimal with no significant maturities until 2025 Note: Data as of 03/31/22; Excludes $8.4M of capital leases 34 NYSE | ABG © Asbury Automotive Group 2022. All rights reserved.

  35. Slide 35: Non-GAAP Financial Disclosure and Reconciliation

    Non-GAAP Financial Disclosure and Reconciliation ™ 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

  36. Slide 36: Non-GAAP Reconciliation – Adjusted Income from Operations and Adjusted Operating Margin

    Non-GAAP Reconciliation – Adjusted Income from Operations and ™ Adjusted Operating Margin For the Three Months ($ In millions) For the Twelve Months Ended December 31, Ended March 31, 2021 2020 2019 2018 2017 2022 2021 Adjusted income from operations: Income from operations $ 791.8 $ 370.8 $ 325.0 $

  37. Slide 37: Non-GAAP Reconciliation – Adjusted EBITDA

    Non-GAAP Reconciliation – Adjusted EBITDA ™ ($ In millions) For the Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Adjusted EBITDA: Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 Depreciation and

  38. Slide 38: Non-GAAP Reconciliation – Adjusted Net Income and Adjusted EPS

    Non-GAAP Reconciliation – Adjusted Net Income and Adjusted EPS ™ (In millions, except per share data) For the Twelve Months Ended December 31, 2021 2020 2019 2018 2017 Adjusted net income: Net income $ 532.4 $ 254.4 $ 184.4 $ 168.0 $ 139.1 Non-core items - (income) expense: Gain on dealership divest

  39. Slide 39: Non-GAAP Reconciliation – Pro Forma Adjusted Net Leverage Ratio

    Non-GAAP Reconciliation – Pro Forma Adjusted Net Leverage Ratio ™ For the Twelve ($ In millions) Months Ended March 31, 2022 Adjusted EBITDA: Calculation of earnings before interest, taxes, depreciation and amortization ("EBITDA"): Net Income $ 677.3 Depreciation and amortization 50.5 Income tax exp

  40. Slide 40: Non-GAAP Reconciliation – Adjusted Cash Flow from Operations

    Non-GAAP Reconciliation – Adjusted Cash Flow from Operations ™ For the Three Months (In millions, except per share data) For the Twelve Months Ended December 31, Ended March 31, 2021 2020 2019 2018 2017 2022 2021 Adjusted cash flow from operations: Cash flow from operations $ 1,163.3 $ 652.5 $ 349.8

Asbury Automotive Group — Q1 2022 Earnings Presentation on 6ix