Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Q4 2023 Earnings Presentation
28 slides from Group 1 Automotive's earnings presentation, Jan 31, 2024
Slide 1: 4Q23 & FY23 Financial Results
4Q23 & FY23 Financial Results Investor Presentation January 31, 2024 Page 1
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, which are statements related to future, not past, events and are based on our current expectations and assumptions regarding our business, th
Slide 3: The Group 1 Way
The Group 1 Way CONSISTENT PROFITABILITY PORTFOLIO PARTS & SERVICE EMPLOYER OF CHOICE LEADING CUSTOMER EXPERIENCE & STRONG CASH FLOW OPTIMIZATION GROWTH OUTPERFORMANCE WITHIN THE AUTO INDUSTRY & PARTNER OF CHOICE Continued strong EPS: 42% CAGR Balanced M&A, share repurchases, Consistent outper
Slide 4: Diversified Geographic Footprint
Diversified Geographic Footprint Worldwide* 199 Dealerships 267 Franchises 41 Collision Centers Maine (4) New Hampshire (5) 35 Brands United States Boston Metro (19) 17 States NYC Metro (4) 144 Dealerships Philadelphia (1) Atlantic City (2) 81% of New Vehicle Unit Sales* Annapolis (2) Sacramento (2)
Slide 5: Exposure to Strong Economic Growth
Exposure to Strong Economic Growth Group 1 will continue to benefit from Texas’s sustained economic growth Texas continues to be the fastest growing state in the U.S.1 is the Texas is the leading destination for companies relocating from other states.2 #1 Auto Retailer in Texas Texas is the #1 U.S.
Slide 6: Business Diversification
Business Diversification Parts & Service business provides stability in economic cycles Revenue Gross Profit Revenue* Gross Profit* Parts & Service is the heart of Group 1’s 40%* 4% business model and generates of total gross profit 12% 25% Finance & Insurance 2023 Fixed Absorption 110%* 34% Parts &
Slide 7: Brand Diversification
Brand Diversification Brand diversity reduces risk from evolving consumer preferences New Vehicle Brand Mix 2023 Revenue Mix Unit Mix 20% 23% 20% 34% 45% 35% 43% 12% Import Luxury Domestic Import Luxury Domestic 9% 8% 8% 6% 6% 6% 5% 4% 4% 4% 3% 2% 2% 2% <1% Other *Based on units sold; may not add to
Slide 8: Transformational Growth Strategy
Transformational Growth Strategy Key focus is growing the company through acquisitions and returning capital to shareholders $4.5B in acquired revenues since the beginning of 2021 Portfolio Optimization Strategic disposition strategy Fragmented U.S. market – top 10 dealer groups sell 10% of
Slide 9: Portfolio Optimization
Portfolio Optimization 2019-20 2021 2022 2023 Acquisitions: Acquisitions: Acquisitions: Acquisitions: $430M $2.5B $940M $1.1B (15 franchises) (58 franchises) (11 franchises) (9 franchises) M&A Dispositions: Dispositions: Dispositions: Dispositions: $300M $155M $265M(1) $420M Capex: Capex: Capex: Cap
Slide 10: Parts & Service Overview
FY23 U.S. SS P&S Sales Parts & Service Overview +8.3%YoY Service-to Service Retention by Model Year* Stability of free cash flow through economic cycles. Above sector-average growth through our strategic emphasis on customer service 61% 79% 77% 73% 73% 71% 69% 67% 65% 62% 56% 69% Attractive benefits
Slide 11: Battery Electric Vehicle Parts and Service Outlook
Battery Electric Vehicle Parts and Service Outlook Our dealerships are equipped to service all powertrain types Group 1 is investing in We are adding EV lifts, We are equipping collision Multiple collision the tooling & battery replace & repair centers in metro areas to centers have been technician
Slide 12: Battery Electric Vehicle Parts and Service Outlook
Battery Electric Vehicle Parts and Service Outlook Our dealerships are equipped to service all powertrain types According to Edmunds.com 5-year repair and maintenance cost of ownership Group 1’s analysis shows that we generate more revenue per repair order for vehicles with alternative powertrains.
Slide 13: AcceleRide Digital Platform Summary
AcceleRide Digital Platform Summary Buy A Ride Sell A Ride AcceleRide drives Inventory selection of new, used, and CPO provides Instant cash offer customer loyalty, retention, identical user experience and employee efficiencies Offer valid for 7 days or 250 miles Digital credit applications with aut
Slide 14: Used Vehicle Overview
Used Vehicle Overview GPI Outperforms the Used Vehicle Industry FY23 GPI U.S. Same Store Unit Sales: +4% YoY FY23 U.S. Used Market Unit Sales: Flat YoY Total Used Vehicle U.S. Used Market Revenues ($MM)* Size1 (MM) U.S. Market Share2 41 Annual Used Vehicle Units +13% 40 40 2019-2023 CAGR 39 39 30% 3
Slide 15: Finance & Insurance Overview
Finance & Insurance Overview 4Q23 U.S. Same Store F&I GP PRU: 4Q23 flat vs 3Q23 Improved F&I profitability via focus on compliance & growth includes: U.S. F&I Gross $2,428 Profit Per Retail $2,338 Unit (PRU) $2,155 Consolidation of lender base $1,951 $1,782 Integration of compliance, training and $1
Slide 16: Structurally Lower SG&A % of GP
Structurally Lower SG&A % of GP 940 Basis Point Improvement vs 2019 64.2% - 23FY Total Adjusted SG&A % of GP* We continue to fully leverage our scale and cost structure 73.6% - 19FY Total Adjusted SG&A % of GP* 2023 2019 4.2% Technology drives customer and employee 2.7% 6.1% efficiencies 5.1% 16.0%
Slide 17: Debt & Interest Rate Exposure
Debt & Interest Rate Exposure ~60% fixed rate debt including floorplan Group 1’s total debt including floorplan was $3.7B: ~$1,565 million of floorplan debt Debt Maturities excludes floorplan $1,000M ~$750 million of mortgage debt ~$750 million of bond debt $750M ~$325 million of acquisition line de
Slide 18: Real Estate Strategy
Real Estate Strategy Dealership Property Breakdown by Region (as of December 31, 2023) Dealerships Region Owned Leased GPI is shifting toward United States 108 36 owning more real estate: United Kingdom 26 29 Total 134 65 Control of dealership real estate is a strong strategic asset Ownership means
Slide 19: Sustainability
Sustainability First U.S. Greenhouse Gas Completed an ESG Materiality Over 600 health and Installed over 2,000 solar panels (GHG) inventory analysis Assessment that identified key in 2022; with a grand total of over safety audits conducted by of our Scope 1 and Scope 2 GHG 8,000 panels at locations a
Slide 20: Group 1 Leadership Team
Group 1 Leadership Team Daryl Kenningham Joined GP1 July 2011 Mike Jones Joined GP1 April 2007 35+ Years Industry Experience 40+ Years Industry Experience President, CEO and Director Manufacturer and Automotive SVP, Aftersales Automotive-related Experience Retailing Experience Daniel McHenry Joined
Slide 21: Group 1's Core Values
Group 1’s Core Values Integrity Transparency Professionalism Teamwork Respect We conduct ourselves with the We promote open and honest We set our standards We put the interest of the group We treat everyone, customers highest level of ethics both communication between each high so that we can exceed
Slide 22: Conclusion
Conclusion Completion of $4.5B in acquired revenues State-of-the-Art digital retailing platform has since the beginning of 2021 grown significantly and allows for much lower cost structure as it gains scale Focused shareholder return with share repurchases and dividend payments Strong aftersales and
Slide 23: Appendix & Non-GAAP Reconciliations
Appendix & Non-GAAP Reconciliations Page 23
Slide 24: Non-GAAP Financial Measures, Same Store Data, and Other Data
Non-GAAP Financial Measures, Same Store Data, and Other Data In addition to evaluating the financial condition and results of our operations in accordance with U.S. GAAP, from time to time our management evaluates and analyzes results and any impact on the Company of strategic decisions and actions
Slide 25: Reconciliation: Adjusted Cash Flow (Non-GAAP)
Reconciliation: Adjusted Cash Flow (Non-GAAP) (unaudited, $MM) 2019 2020 2021 2022 2023 Operating Cash Flow (GAAP) $ 371 $ 805 $ 1,260 $ 586 $ 190 Change in Floorplan notes payable - credit facilities and other, excluding floorplan offset account and net acquisitions and dispositions (43) (314) (491
Slide 26: Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP)
Reconciliation: Adjusted Total Earnings Per Share (Non-GAAP) (unaudited) 2019 2020 2021 2022 2023 As Reported EPS $ 9.34 $ 15.51 $ 30.11 $ 47.14 $ 42.73 After Tax Adjustments: Asset impairments and accelerated depreciation 0.94 1.69 0.07 0.10 1.82 (Gain) loss on real estate and dealership transactio
Slide 27: Reconciliation: Adjusted SG&A (Non-GAAP)
Reconciliation: Adjusted SG&A (Non-GAAP) (unaudited, $MM) 2019 2023 SG&A Expenses - GAAP $ 1,312.4 $ 1,926.8 (Gain) loss on real estate and dealership transactions 3.9 22.0 Catastrophic Events (17.8) (3.4) Legal items and other professional fees (1.1) (6.1) Acquisitions costs including related tax i
Slide 28: group1auto.com
group1auto.com Page 28