Group 1 Automotive, Inc. · NYSE:GPI
Group 1 Automotive — Merger or Acquisition (January 2013)
32 slides from Group 1 Automotive's merger presentation, Jan 25, 2013
Slide 1: UAB Motors Pending Acquisition
Exhibit 99.2 ‘VALUE DRIVEN’ UAB Motors Pending Acquisition Brazil Copyright © 2012 Group 1 Automotive, Inc. All rights reserved. January 25, 2013
Slide 2: Safe Harbor
Safe Harbor 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, the economy and o
Slide 3: Table of Contents
Table of Contents I. Transaction Overview II. Brazil Overview III. UAB Overview IV. Summary V. Appendix
Slide 4: Transaction Overview
Transaction Overview
Slide 5: UAB – Pending Acquisition Detail
UAB – Pending Acquisition Detail UAB Motors Participações S.A. Acquiring 18 dealerships / 21 franchises and 5 collision centers in Brazil with estimated annual revenues of US$650 million – No property purchases • Sale / Leaseback environment Consideration includes US$47.4 million cash / 1.45 million
Slide 6: Why Brazil?
Why Brazil? 4th Largest new vehicle sales market – 9.1% 5-year CAGR (2007-2012) Vehicles-per-population is one of the lowest in developed markets Highly fragmented, little consolidation – Top 15 auto dealers represent ~19% of the total market Numerous acquisition opportunities Positive economic outl
Slide 7: Brazil Overview
Brazil Overview
Slide 8: Brazil – Overview
Brazil – Overview Number of States: 27 Country Dimension: 5.3 million sq mi 7th Largest economy – 2011 GDP: US$2.3 trillion – Real GDP Growth • 2011: 2.7% Brasilia • 2012E: 0.9% – 5-year projected CAGR: 4.1% 5th Largest population Rio de Janeiro – July 2012 Estimate:199 million Sao Paulo – 2012 Esti
Slide 9: Why Brazil? Future GROWTH!
Why Brazil? Future GROWTH! Brazil new vehicle market growing quickly – Industry sales have grown at a 9.1% CAGR since 2007 and are estimated to increase ~30% over the next five years – Expect new vehicle unit sales of 3.95 million in 2013 • Up ~9% from 2011 – Market growth is over-weighted toward no
Slide 10: Brazil – New Vehicle Unit Sales
Brazil – New Vehicle Unit Sales New Vehicle Unit Sales Unit Sales (millions) 6.0 Main Players 1950 – 1980 5.0 4.0 3.0 2.0 1.0 0.0 1990: Opening of the Brazilian market to free trade Source: ANFAVEA (1957 – 2012) and IHS (2014-2020) Group 1 Automotive,Inc. 10
Slide 11: Brazil – Auto Industry Dynamics
Brazil – Auto Industry Dynamics UAB brands expected to gain 6.7% from 2005-2017 at the expense of the Big Four brands Market Share Evolution Market Share 30% 25.2% 25% 23.0% 22.2% 21.9% 21.3% 20.2% 19.6% 20% 19.2% 15.4% 15% 12.4% 9.8% 9.4% 10% 8.1% 6.3% 5.8% 5.9% 5.0% 5.2% 5.0% 5% 3.9% 3.7% 3.8% 4.0
Slide 12: Overview of Recent IPI Modifications
Overview of Recent IPI Modifications IPI: National single-stage VAT-type tax levied on the manufacture of goods in Brazil and the import of goods Recent IPI News • In August, sales • The IPI tax on imported reached record high • After the • 12/31/2012: Govt cars was raised by 30 volumes as second an
Slide 13: Brazil – Household Evolution
Brazil – Household Evolution Potentially 10 million new customers by 2015 Households with Spending Power > EUR 11,000 per year (Households in millions) 40.0 32.1 30.0 22.5 20.0 10.7 10.0 7.0 0.0 2001 2005 2010 2015E Total 45.5 52.9 57.3 64.6 Households Source: Roland Berger / Automotive Market Outlo
Slide 14: Brazil – Future Consolidation
Brazil – Future Consolidation Dealership Breakdown by OEM (2011) (1) Market Commentary Fiat The auto dealerships market is experiencing a Others 14% transformation, in which monetized players are 23% well-positioned for market consolidation Ford 11% Alternatively, many smaller groups are Toyota 3% c
Slide 15: Brazil Economic Outlook
Brazil Economic Outlook Brazil GDP Evolution Vehicle Ownership in Brazil (US$ in billions) (Cars per 1,000 Inhabitants) $9,000 900 802 797 $5,862 $6,000 600 250 276 262 289 $3,000 $1,990 300 $1,345 145 152 20 22 38 43 $0 0 2000 2010 2030 India China Brazil Mexico Russia U.S. 2009 2010 World Ranking
Slide 16: Brazil vs. U.S. Market Comparison
Brazil vs. U.S. Market Comparison Key Market Differences… Smaller dealership facilities – Urban locations common – Less outdoor display for new and used vehicles Finance & Insurance is lower – DMV registration process prevents same-day deliveries Lower overall investment in facilities – Typically le
Slide 17: UAB Overview
UAB Overview
Slide 18: UAB Overview
UAB Overview Founded in 1999 Strong, well-respected management team took control in 2005 Management active on dealer councils for all key brands in portfolio 18 Dealerships / 21 Franchises – aligned with brands that are expected to grow market share in Brazil – 4 BMW; 2 MINI; 2 Toyota; 3 Renault; 4
Slide 19: UAB Market Overview
UAB Market Overview Located in 2 of the 3 largest sales markets in Brazil – In major cities in the states of Sao Paulo and Parana Sao Paulo Locations Parana Locations Sao Paulo Curitiba Sao Jose dos Campos Londrina Santo Andre Cascavel Sao Caetano do Sul Sao Bernardo do Campo Sao Paulo Parana Group
Slide 20: UAB Dealerships
UAB Dealerships BMW Cascavel Nissan Parque Land Rover Curitiba MINI Londrina Toyota Tatuape Renault Joso Dias Group 1 Automotive,Inc. 20
Slide 21: Attractive Brand Mix
Attractive Brand Mix UAB vs. Industry New Vehicle Unit Sales 2012E New Vehicle Brand Mix (2012E Revenues) % Mix 100% Land Rover Renault 4% 15% 18% 5% 10% 80% BMW / MINI 17% 15% 60% 82% Nissan 28% 30% Toyota 40% Peugeot 14% 10% UAB brands are well-positioned for growth 20% – One of the largest dealer
Slide 22: Business Mix Comparison
Business Mix Comparison Group 1 Auto (YTD 9/30/2012) UAB (2012E) % Mix % Mix 100% 100% 3% 1% 11% of Revenues 9% 15% of Revenues 10% 12% Generate 40% of Generate 64% of 23% Gross Profit Gross Profit 80% 80% 17% 31% 28% 60% 60% 41% 8% 40% 40% 72% 57% 14% 52% 20% 20% 22% 0% 0% Revenues Gross Profit Rev
Slide 23: Pro Forma Business Mix
Pro Forma Business Mix Revenue by Segment (1) Group 1 UAB Pro Forma Finance & Insurance Finance & Insurance Finance & Insurance 3% 1% 3% Parts & Services Parts & Services Parts & Services 10% 12% 12% Used Vehicle Sales Used Vehicle Sales Used Vehicle Sales New Vehicle Sales New Vehicle Sales 17% 27%
Slide 24: Summary
Summary
Slide 25: What GPI Brings To The Table
What GPI Brings To The Table Capital and floorplan capacity Used vehicle retail sales expertise Parts & service efficiencies Improved finance & insurance processes Advanced technologies Shared best practices Sales and service training Management team with international experience Group 1 Automotive,
Slide 26: Acquisition Timing
Acquisition Timing January 24, 2013 – Press release issued January 25, 2013 – Form 8-k filed – Slide deck posted to website – Conference call held January – February 2013 – Manufacturer approvals obtained Targeted deal closing on February 28, 2013 Group 1 Automotive,Inc. 26
Slide 27: Conclusion
Conclusion Significant growth opportunities Best-in-class dealership group in the market Highly successful local management team will continue to run business Gives GPI established growth platform Capital, systems expertise, manufacturer relations support from GPI should help drive growth and operat
Slide 28: Visit: www.Group1Auto.com
CORE VALUES Integrity – we conduct ourselves with the highest level of ethics both personally and professionally when we sell to and perform service for our customers without compromising our honesty Transparency – we promote open and honest communication between each other and our customers Profess
Slide 29: Appendix
Appendix
Slide 30: Operating Management Team - Corporate
Operating Management Team - Corporate Earl J. Hesterberg – President and Chief Executive Officer and Director (April 2005) 35+ Years Industry Experience Manufacturer and Automotive Retailing Experience: Ford Motor Company; Ford of Europe; Gulf States Toyota; Nissan Motor Corporation in U.S.A.; Nissa
Slide 31: Operating Management Team - Field
Operating Management Team - Field Frank Grese Jr. – Regional Vice President, West Region (January 2006) – 35+ Years Industry Experience – Manufacturer and Automotive Retailing Experience: Ford Motor Company; Nissan Motor Corporation in U.S.A.; AutoNation; Van Tuyl Daryl Kenningham – Regional Vice Pr
Slide 32: UAB / Operations
UAB / Operations Lincoln da Cunha Pereira, 52. Chairman of UAB’s board of directors since October 2007 and legal representative of a public auto group from 1999 to 2005. He incorporated Atrium Telecomunicações in 1999, and entered into an association agreement with JP Morgan Partners, GE Equity and
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