Slide 1: AutoCanada Investor Presentation Q3 2021
AUTOCANADA INVESTOR PRESENTATION Q3 2021 NOVEMBER 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statement Certain information contained in this presentation is forward-looking information within the meaning of applicable Canadian securities legislation. The use of any of the words “could”, “expect”, “believe”, “will”, “projected”, “estimated” and simi
Slide 3: Who We Are
WHO WE ARE
Slide 4: AutoCanada Overview
AutoCanada Overview A Leading North American Multi-Location Automobile Dealership Group At a Glance1 • One of Canada’s largest multi-location automobile dealership groups with ~4,000 49 18 Franchises in Canada Franchises in Illinois, U.S. employees • Only publicly listed auto dealership group in Can
Slide 5: Investment Highlights
Investment Highlights Large and Highly Fragmented Canadian Resilient Strong Stewards Market with Significant Business Model of Capital Consolidation Opportunities Accelerated Growth Through Complete Business Model Significant Experienced First Mover Advantage Organic Growth Leadership with Canadian
Slide 6: Attractive Canadian Market
Attractive Canadian Market 3,359 Dealerships in Canada AutoCanada NEW 2% VEHICLE MARKET Other Dealers 98% $244 BILLION + 1.6 Million New Vehicles MARKET 3.0 Million Used Vehicles Franchised New Car Used Car Dealers USED Dealers 31% 34% VEHICLE MARKET SHARE AutoCanada 1% Private Parties 34% 6 Source:
Slide 7: Stable Canadian Automotive Markets
Stable Canadian Automotive Markets Resilient Business Model Historically Stable Growing New and Used Retail Vehicle Sales in Canada1 ($M) • Consumers continue to buy more vehicles every • Increase in first-time buyers supports increasing year, further supporting our continued growth used vehicle sal
Slide 8: Revenue Diversity Across Brands and Geographies
Revenue Diversity Across Brands and Geographies Resilient Business Model % of AutoCanada Revenue by Region 1 AUTOCANADA CANADIAN NEW VEHICLE MIX BC Segment Brand Segment Brand % Revenue % % 23.6% 13.0% 12.9 AB Hyundai 9% 24.6% (excl. Calgary) MB Nissan 5% Import 25% Infiniti 1% 6.5% Mazda 1% CALGARY
Slide 9: Dealership Locations and Brands
Dealership Locations and Brands Resilient Business Model AutoCanada Owns Some of the Best Performing Dealerships in Canada British Columbia Alberta Dealership Awards1 Abbotsford Volkswagen Airdrie Dodge Fish Creek Nissan Grande Prairie Volkswagen Ponoka Chrysler Chilliwack Volkswagen Capital Jeep Do
Slide 10: Profitable Product Mix & Diverse Earnings Streams Provide Stability
Profitable Product Mix & Diverse Earnings Streams Provide Stability Resilient Business Model New Used PS&CR F&I 6% 16% 10% 30% 60% 44% Go Forward initiatives 30% focused on higher margin 84% segments 20% 40% 40% 20% REVENUE1 GROSS PROFIT1 16% of our revenue drives 60% of gross profit 1 As at TTM Q3
Slide 11: Growth Levers
Growth Levers Strategic growth initiatives driving industry-leading performance 1 New Vehicles 2 Used Vehicles Finance & CAPITAL ALLOCATION PRIORITIES Insurance 3 RightRide M&A 4 Collision Used Digital Business Rocket Boosters 5 Intelligence Parts & Service 6 Multiple value creation levers to drive
Slide 12: Drive Growth Through Optimization of Finance & Insurance
Drive Growth Through Optimization of Finance & Insurance Significant Organic Growth Opportunities Resiliency • Dedicated F&I team with in-house training team to educate Same Store F&I Gross Profit ($M) dealership network on standardized product portfolio and 55.9 sales process 54.0 46.3 • Eleven con
Slide 13: Service Bay Occupancy & Business Development Centre (BDC)
Service Bay Occupancy & Business Development Centre (BDC) Significant Organic Growth Opportunities • BDC is a call centre dedicated to handle all Same Store Parts, Service & Collision Repair service work appointment bookings across Gross Profit ($M) our Canadian dealerships 56.8 54.4 51.7 50.1 50.4
Slide 14: Project 50 – Increasing Used Vehicles Sales
Project 50 – Increasing Used Vehicles Sales Significant Organic Growth Opportunities • Additive to new vehicles to grow total unit sales • Drives incremental revenues in high margin business segments (F&I and PS&CR) • Counter-cyclical and protects against recessionary environments • Have sold an ave
Slide 15: RightRide – Fueling Organic Growth
RightRide – Fueling Organic Growth Significant Organic Growth Opportunities • No credit risk retained by AutoCanada • Ability to offer attractive financing products to credit-challenged customers • Geared to today’s economy as well as in a declining economy - Extension of Project 50 • Digital sales
Slide 16: Collision Centre Expansion
Collision Centre Expansion Significant Organic Growth Opportunities • Currently operating 18 locations, predominantly within dealerships • Collision centre operations add to stability of revenues, significant growth opportunity in a $6B market1 • Initiatives include: o Consolidation of existing cent
Slide 17: Generated $119M of Free Cash Flow TTM Q3 2021
Generated $119M of Free Cash Flow TTM Q3 2021 Improved Net Debt Leverage to 0.2x from 1.6x PROVEN ABILITY TO REDUCE LEVERAGE ($M) Debt EBITDA Net Indebtedness Net Debt/AEBITDA Pre-IFRS 16 Total Funded Net Debt/Bank AEBITDA NET DEBT LEVERAGE Q3 2021 ($M) Floorplan 569.9 Long Term Debt 250.7 Cash on H
Slide 18: Capital Allocation Strategy
Capital Allocation Strategy Strong Stewards of Capital • AutoCanada capital allocation aligned with business strategy, growth opportunities and free cash flow profile CAPITAL ALLOCATION PRIORITIES 1 2 3 4 Organic Growth / Internal M&A / Strategic Liability Management Return to Shareholders Investmen
Slide 19: Well Positioned for Industry Consolidation Through Disciplined M&A Strategy
Well Positioned for Industry Consolidation Through Disciplined M&A Strategy Significant Consolidation Opportunities • Advance and actively assess strategic acquisition Acquisitions are a key part of opportunities and develop a robust acquisition pipeline capital allocation strategy • Employ a discip
Slide 20: Acquisitions to Date
Acquisitions to Date Executing on Robust Pipeline of Opportunities Date Company Location Type Description • Collision centre specializing in luxury vehicles including Land Oct. 2020 Auto Bugatti Inc. Montreal, QC Collision Rover, Jaguar, Porsche, Aston Martin,Tesla, BMW, MINI Autohaus of • Luxury de
Slide 21: Management Team With Proven Track Record Driving Vision & Strategy
Management Team With Proven Track Record Driving Vision & Strategy Experienced Leadership Team Paul Antony Michael Rawluk Mike Borys Peter Hong Executive Chairman President of Canadian Operations Chief Financial Officer Chief Strategy Officer & General Counsel, Joined May 2018 Joined June 2018 Joine
Slide 22: Environment, Social & Governance (ESG) Overview
Environment, Social & Governance (ESG) Overview Focus on areas that positively impact our business and society • We are committed to responsible business practices and driving continuous improvement of our operations and our relationships with our employees and the communities in which we live and w
Slide 23: Used Digital Retail Strategy
USED DIGITAL RETAIL STRATEGY
Slide 24: COVID-19 Pandemic Accelerating Consumer Shift to Digital
COVID-19 Pandemic Accelerating Consumer Shift to Digital U.S. eCommerce penetration experienced Increased Focus on Car Ownership and 10 years’ growth in 3 months eCommerce1 93% Using personal cars more often 40% Considering buying a car 33% Moving faster to buy a car due to COVID-19 Open to Car Buyi
Slide 25: Crawl, Walk, Run – Disciplined Approach
Crawl, Walk, Run – Disciplined Approach • First-mover with significant structural advantage – scale, AutoCanada leadership and domain expertise • Attractive market entry with low capital intensity • Drive meaningful improvement beyond current Used to New ratio • Attract consumers earlier in car buyi
Slide 26: In Conclusion – Key Takeaways
In Conclusion – Key Takeaways • Strong progress on building a ‘Complete’ Business Model o Go Forward Plan initiatives taking hold, driving resiliency to deliver top-decile performance in any economic environment • Strengthened balance sheet and capital structure supports ample dry powder to take adv
Slide 27: Q3 2021 Results
Q3 2021 RESULTS
Slide 28: Q3 2021 Results Overview
Q3 2021 Results Overview Record Third Quarter Results - AEBITDA of $68.3 Million, up 25% on Normalized Basis • Revenue was highest third quarter revenue reported in Company’s history • Consolidated used to new retail unit ratio improved to 1.49 from 0.82 last year; TTM improved to 1.22 at Q3 2021, m
Slide 29: Q3 2021 Results Continued
Q3 2021 Results Continued Record Setting Third Quarter ($M, unless otherwise noted) Q3 2021 Q3 2020 Change Consolidated Revenue 1,206.8 1,017.1 19% Gross Profit % 18.2% 17.6% +0.6 ppts Adjusted EBITDA 68.3 61.1 12% Adjusted EBITDA % 5.7% 6.0% - 0.3 ppts Adjusted EBITDA Pre-IFRS 16 57.4 50.2 14% Adju
Slide 30: Q3 2021 Performance - TTM vs Q3 2019 TTM
Q3 2021 Performance - TTM vs Q3 2019 TTM TTM Results Compared to 2019 Highlights Improvement Over Last 3 Years TTM TTM ($M, unless otherwise noted) Change Q3 2021 Q3 2019 Consolidated Revenue 4,333.8 3,449.8 +884.0 Adjusted EBITDA Pre-IFRS 16 183.7 55.2 +128.5 Adjusted EBITDA Pre-IFRS 16 % 4.2% 1.6%
Slide 31: Canadian Operations Results - Used & F&I Key Drivers
Q3 2021 Results Continued Canadian Operations Results - Used & F&I Key Drivers • Total gross profit percentage increased to 18.4% as compared to 17.7% in the prior year • Used vehicle gross profit increased by 32.2% to $35.0 million as compared to the prior year • For the twelfth consecutive quarter
Slide 32: U.S. Operations Results – Another Breakout Quarter
Q3 2021 Results Continued U.S. Operations Results – Another Breakout Quarter, Exceptional Performance • Strategic decisions executed by new U.S. management team in Q2 2021 flowed into Q3 2021 and positioned the U.S. Operations for another strong quarter • Total gross profit percentage set a third qu
Slide 33: Free Cash Flow
Free Cash Flow Strong and Consistent Free Cash Flow Generation Over the Past Nine Quarters • 2020 impacted by government assistance benefit of $35.5 million ($M) 75 178.0 TTM 118.8 TTM 65.8 67.8 52.6 53.4 50 25 19.2 19.4 12.4 6.2 0 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 33
Slide 34: Appendix
APPENDIX
Slide 35: Supplemental Information
Supplemental Information EBITDA and Adjusted EBITDA $M Q3 2021 Q3 2020 Q3 2019 Net (loss) income 39 36 (4) Addback: Income taxes 8 5 4 Depreciation and amortization 11 10 11 Interest charges 10 10 10 EBITDA 68 61 21 Addback: Impairment of non-financial assets, net - - - Financing and risk management
Slide 36: Thank You
AUTOCANADA THANK YOU INVESTORS.AUTOCAN.CA