Penske Automotive Group, Inc. · NYSE:PAG

Penske Automotive — Q3 2024 Earnings Presentation

40 slides from Penske Automotive's earnings presentation, Oct 29, 2024

  1. Slide 1: Q3 and 9M 2024 Financial Results

    Q3 and 9M 2024 FINANCIAL RESULTS October 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, acquisition activity, future revenue expectations, and future plans. Actual results may v

  3. Slide 3: A Diversified Transportation Services Company

    A Diversified Transportation Services Company Headquartered in Bloomfield Hills, MI USA For the Nine Months Ended September 30, 2024: 28,950 4 9 employees worldwide continents countries 371,068 $22.7B new & used units delivered revenue 360* 15* automotive franchised used vehicle dealerships centers

  4. Slide 4: World Class Brands in Automotive & Trucks

    WORLD CLASS BRANDS IN AUTOMOTIVE & TRUCKS PENSKE AUTOMOTIVE GROUP / 4

  5. Slide 5: Retail Automotive Brand Mix

    RETAIL AUTOMOTIVE BRAND MIX 72% 20% 2% 6% Premium Volume Non-U.S. U.S. Used Only (For the Nine Months Ended September 30, 2024) (% of Total Worldwide Automotive Dealership Revenue) 26% 14% 10% 9% 9% 8% 6% 6% 4% 3% 2% 2% 1% Used Other Only PENSKE AUTOMOTIVE GROUP / 5

  6. Slide 6: Capital Allocation

    CAPITAL ALLOCATION (In Millions) 2019 2020 2021 2022 2023 2024* Dividends $131 $68 $143 $154 $189 $195 Capital $245 $186 $249 $283 $375 $283 Expenditures Share Repurchases $174 $35 $294 $887 $382 $77 Acquisitions (including $327 --- $432 $393 $215 $637 repayment of seller’s floorplan notes) Total $8

  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 $1,878 3 $2,000 2.9x $1,690 $1,622 $1,629 2.5 $1,500 $1,474 2 $1,000 1.8x 1.5 1.3x 1 $500 1.0x 0.8x 0.8x 0.5 $- 0 2019 2020 2021 2022 2023 Sept '24 YTD Debt Leverage Note: Refer to Non-GAAP Reconciliation Section PENSKE A

  8. Slide 8: Q3 & 9M 2024 Review

    Q3 & 9M 2024 REVIEW

  9. Slide 9: PAG Highlights – 9M 2024

    PAG HIGHLIGHTS – 9M 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 Q3 Total Revenue Q3 Net Income Attributable to Q3 Income Per Share ($ in Billions) Common Stockholders ($ in Millions) $7.6 $340 $4.61 $7.4 $263 $3.92 $6.9 $226 $3.39 Q3 '22 Q3 '23 Q3 '24 Q3 '22 Q3 '23 Q3 '24 Q3 '22 Q3 '23 Q3 '24 9M Total Revenue 9M Net Income Attributable to

  11. Slide 11: Q3 & 9M Performance Highlights

    Q3 & 9M PERFORMANCE HIGHLIGHTS ($ in Millions, except Per Share Amount) Q3 ‘24 Q3 ‘23 CHG 9M ’24 9M ‘23 CHG Revenue $7,591 $7,448 +2% $22,735 $22,255 +2% Excl F/X $7,522 $7,448 +1% $22,569 $22,255 +1% Retail Auto Same-Store Revenue $5,896 $6,190 -5% $18,278 $18,626 -2% Excl F/X $5,835 $6,190 -6% $18

  12. Slide 12: Retail Automotive

    RETAIL AUTOMOTIVE

  13. Slide 13: Retail Auto Diversified Revenue

    (For the nine months ended September 30, 2024) 5% 2% 3% 19% 26% 12% 45% GROSS REVENUE PROFIT RETAIL AUTO 11% DIVERSIFIED 35% 42% REVENUE STREAM PENSKE AUTOMOTIVE GROUP / 13

  14. Slide 14: Retail Automotive Same-Store Revenue

    RETAIL AUTOMOTIVE SAME-STORE REVENUE ($ in millions) Q3 ’24 Q3 ’23 CHG 9M ’24 9M ’23 CHG New Vehicle $2,688 $2,725 -1% $8,238 $8,247 --- Used Vehicle $1,968 $2,225 -12% $6,247 $6,652 -6% F&I $186 $205 -9% $584 $614 -5% Service & Parts $731 $681 +7% $2,158 $2,041 +6% Fleet & Wholesale $323 $354 -9% $

  15. Slide 15: Retail Automotive Key Metrics

    RETAIL AUTOMOTIVE KEY METRICS Same-Store Q3 ’24 Q3 ’23 Chg 9M ’24 9M ’23 Chg VOLUME METRICS New Units* 46,189 47,777 -3% 141,729 144,588 -2% Used Units 53,826 61,520 -13% 176,794 185,106 -5% Total 100,015 109,297 -9% 318,523 329,694 -3% Agency Units 9,353 8,678 +8% 27,214 24,489 +11% Total Units 109

  16. Slide 16: Gross Per Unit Retailed

    GROSS PER UNIT RETAILED (BY QUARTER) GROSS PER UNIT STABILITY NEW USED $6,315 $6,259 $5,790 $5,531 $5,229 $5,302 $5,072 $1,887 $1,876 $1,822 $1,882 $1,808 $3,286 $1,564 $1,448 $1,255 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2019 2023 2024 2019 2023 2024 PENSKE AUTOMOTIVE GROUP / 16

  17. Slide 17: Retail Commercial Truck

    TRUCK GROUP RETAIL COMMERCIAL TRUCK

  18. Slide 18: North American Locations

    NORTH AMERICAN LOCATIONS  One of the largest dealership groups for Freightliner North America  35 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

  19. Slide 19: Retail Commercial Truck

    (For the nine months ended September 30, 2024) 1% 5% 27% RETAIL 25% COMMERCIAL REVENUE 68% GROSS PROFIT 3% TRUCK 6% 65% DIVERSIFIED REVENUE STREAM PENSKE AUTOMOTIVE GROUP / 19

  20. Slide 20: Performance Summary – Retail Commercial Truck

    PERFORMANCE SUMMARY – RETAIL COMMERCIAL TRUCK (For the three months and nine months ended September 30, 2024) Q3 Units Q3 Revenue Q3 Earnings Before Tax ($ in Millions) ($ in Millions) 6,031 6,331 $1,063 $1,020 $53 $61 $57 5,556 $965 Q3 '22 Q3 '23 Q3 '24 Q3 '22 Q3 '23 Q3 '24 Q3 '22 Q3 '23 Q3 '24 9M

  21. Slide 21: Retail Commercial Truck Key Metrics

    RETAIL COMMERCIAL TRUCK KEY METRICS Same-Store Q3 ’24 Q3 ’23 Chg 9M ‘24 9M ‘23 Chg VOLUME METRICS New Units 5,163 4,673 +11% 12,648 13,532 -7% Used Units 917 883 +4% 2,651 2,224 +19% Total Units 6,080 5,556 +9% 15,299 15,756 -3% GROSS PER UNIT New $8,200 $8,631 -5% $8,729 $7,915 +10% Used $5,249 $5,

  22. Slide 22: Australia/New Zealand

    AUSTRALIA/ NEW ZEALAND

  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 in June 2024  Signed an agreement to acquire Porsche Centre Melbourne in October 2024 Porsche Centre Melbourne  $260 million estimated annualized acquired revenue Porsche Centre Doncaster Porsche Centre Brighton PENSKE AUTO

  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 nine months ended September 30, 2024)  Managed fleet of over 442,000 trucks, tractors and trailers 27%  Sequential improvement in the net income of 14% from $183 Q3 50% million to $209 million 2024 4% 19% Q1 ‘24 Q2 ‘24 Q3 ‘24 9M ‘24 Revenue (in billions) $

  28. Slide 28: PTS Performance Summary

    PTS PERFORMANCE SUMMARY (For the three months and six months ended June 30, 2024) PAG Equity Income of $146 Million 9M 2024 Year-To-Date Operating Revenue Net Income ($ in Billions) ($ in Millions) $469 $2.7 $2.8 $2.8 $291 $209 Q3 '22 Q3 '23 Q3 '24 Q3 '22 Q3 '23 Q3 '24 $8.1 $8.3 $1,351 $824 $7.6 $50

  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) 439 442* 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 September 30, 2024) PENSKE AUTOMOTIVE

  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 nine months ended September 30, 2024 and 2023 Three Months Ended September 30, Change 2024 vs 2023 ($ in

  37. Slide 37: EBITDA & Leverage Ratio Reconciliation

    EBITDA & LEVERAGE RATIO RECONCILIATION ($ in Millions) Three Months Nine Months Trailing Ended Ended Twelve Months December 31, 2023 September 30, 2024 September 30, 2024 Net Income $192.0 $686.1 $878.1 Add: Depreciation $37.6 $117.0 $154.6 Add: Other Interest $23.1 $64.1 $87.2 Add: Income Taxes $63

  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 - 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 $141.0 $127.3 $121.5

  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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