Penske Automotive Group, Inc. · NYSE:PAG
Penske Automotive — Q1 2020 Earnings Presentation
34 slides from Penske Automotive's earnings presentation, May 6, 2020
Slide 1: First Quarter 2020 Financial Results & Update
First Quarter 2020 Financial Results & Update
Slide 2: Forward-Looking Statements
Statements in this presentation may involve forward-looking statements, including forward-looking statements regarding Penske Automotive Group, Inc.’s financial results, future sales, earnings potential, liquidity and assessment of business conditions in light of the Covid-19 pandemic. Actual result
Slide 3: Diversification
Diversification FRANCHISED AUTOMOTIVE DEALERSHIPS RETAIL COMMERCIAL LEASING, RENTAL & TRUCK LOGISTICS* DEALERSHIPS USED VEHICLE TRUCK DISTRIBUTION SUPERCENTERS & POWER SYSTEMS * PAG maintains a 28.9% ownership interest in Penske Truck Leasing and records a share of earnings using the equity method.
Slide 4: Penske Automotive Group Overview
Penske Automotive Group Overview • A diversified transportation services company with annual revenues in 2019 of $23.2 billion • 265 Retail automotive locations world-wide • 249 Automotive dealerships • 16 Used vehicle supercenters • 34 Collision centers • 25 N.A. commercial truck dealerships 4
Slide 5: Revenue and Earnings History
Revenue and Earnings History REVENUE INCOME – CONT OPERATIONS ($ in Millions) ($ in Billions) $22.8 $23.2 $21.4 $613.6 $20.1 $19.3 $243.4* $470.5 $17.2 $11.6* $458.9 $14.5 $435.5 $370.2 $12.9 $344.0 $329.6 $10.9 $301.4 $9.7 $247.0 $194.2 $172.4 $119.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 201
Slide 6: First Quarter 2020 Financial Review
FIRST QUARTER 2020 FINANCIAL REVIEW
Slide 7: 3M 2020 Revenue & EBT
3M 2020 Revenue & EBT Revenue Revenue Earnings Before Tax $5.0 Billion $5.0 Billion $71.5 Million 19% 33% 10% 59% 88% 58% 2% 23% 8% Retail North America Retail Commercial Other* Automotive United Kingdom Truck Other *Includes equity income from joint venture investments, including Penske Transportat
Slide 8: Q1 2020 Results – Continuing Operations
Q1 2020 Results – Continuing Operations ($ in Millions, except per share amounts) Q1 2020 Q1 2019 Chg. % Revenue $5,009.1 $5,564.4 -10% Gross Profit $776.7 $851.5 -9% Gross Margin % 15.5% 15.3% +20 Bps SG&A as % of GP 82.6% 78.3% +430 Bps Operating Income $106.4 $158.7 -33% Earnings Before Taxes $71
Slide 9: Q1 2020 Review
Q1 2020 Review • Retailed 106,000 new and used units, down 16% U.S. Intl Total Jan/Feb 2020 +7.1% -4.7% +1.3% March 2020 -41.1% -42.4% -41.8% Q1 2020 Total -11.6% -21.1% -16.4% • Revenue declined 10% to $5.0 billion • Same-store retail automotive revenue declined 12.0% U.S. Intl Total Jan/Feb 2020 +
Slide 10: Q1 2020 Retail Automotive Key Metrics
Q1 2020 Retail Automotive Key Metrics Same-Store Metrics Q1 ’20 Q1 ’19 Change Volume Metrics New Units 43,151 52,327 -18% Used Units 61,719 70,364 -12% Used to New Ratio 1.43 1.34 +7% Margin Metrics New Margin 7.4% 7.7% -30 Bps Used Margin 5.3% 5.2% +10 Bps Service & Parts Margin 59.1% 59.2% -10 bps
Slide 11: Q1 2020 Gross Profit Per Unit (Same-Store)
Q1 2020 Gross Profit Per Unit (Same-Store) U.S. Q1 ’20 Q1 ’19 Change New Vehicle $3,072 $3,047 +$25 Used Vehicle $1,569 $1,428 +$141 F&I $1,453 $1,357 +$96 Variable Gross(1) $3,752 $3,584 +$168 International Q1’20 Q1 ’19 Change New Vehicle $3,433 $3,438 -$5 Used Vehicle $1,212 $1,246 -$34 F&I $1,265
Slide 12: Selected Performance Metrics (Same-Store)
Selected Performance Metrics (Same-Store) United States International Total $ in Millions 2020 2019 Chg. 2020 2019 Chg. 2020 2019 Chg. FEB YTD New Units 19,604 18,484 6.1% 8,658 9,418 -8.1% 28,262 27,902 1.3% Used Units 20,938 19,245 8.8% 25,559 25,178 1.5% 46,497 44,423 4.7% Total 40,542 37,729 7.5
Slide 13: U.S. Operations Selected Information - 2020
U.S. Operations Selected Information - 2020 • Last Ten Days of April vs Last Ten Days of March • New Units +12% • Used Units +49% • Total units +40% • Last Ten Days of April vs First Ten Days of April • New Units +33% • Used Units +51% • Total units +55% 13
Slide 14: COVID-19 Actions
COVID-19 Actions • Increased cash position with drawdowns on credit agreements • Enhanced dealership cleaning protocol, implemented vehicle sanitization; touchless delivery, pick-up and drop off service, etc. • Initiated significant expense reduction • Deferred $150 million in capital expenditures •
Slide 15: Used Supercenters
USED SUPERCENTERS
Slide 16: Used Vehicle SuperCenters
Used Vehicle SuperCenters Q1 ‘20 Q1 ‘19 Chg % Used Units Retailed 16,312 18,040 -9.6% Revenue (in millions) $305 $314 -2.8% Avg. Transaction Price $15,158 $14,567 +4.1% Total Variable Gross/Unit $1,953 $1,990 -2.0% Vehicle Margin 12.9% 13.7% -80 Bps 16
Slide 17: Used Vehicle SuperCenters Revenue & Gross
Used Vehicle SuperCenters Revenue & Gross (Q1 2020) Revenue Gross Profit $305 Million $40 Million 19% 11% 81% 51% 7% 28% 1% 2% Used Wholesale F&I S&P 17
Slide 18: Commercial Trucks
COMMERCIAL TRUCKS
Slide 19: Q1 2020 Retail Truck Key Metrics
Q1 2020 Retail Truck Key Metrics Same- Q1 ’20 Q1 ’19 Chg. Store Chg. Volume Metrics New Units 2,811 1,887 +49% -2% Used Units 698 416 +68% +23% Gross Per Unit New Vehicle $4,455 $5,391 -17% -24% Used Vehicle ($3,511) $6,557 -154% -103% F&I $907 $1,309 -31% -24% 19
Slide 20: Retail Commercial Truck Revenue & Gross
Retail Commercial Truck Revenue & Gross Q1 2020 78% of Gross Profit From Service & Parts Revenue Gross Profit New 64.8% 18.2% Used 7.0% (3.6%) F&I 0.7% 4.7% S&P 25.3% 77.6% Other 2.2% 3.1% Total 100.0% 100.0% 20
Slide 21: Penske Transportation Solutions
PENSKE TRANSPORTATON SOLUTIONS
Slide 22: PTS Q1 Performance Summary
PTS Q1 Performance Summary Q1 Total Revenue Q1 Net Income ($ in Millions) ($ in Millions) $2,200 $2,100 $89* $1,900 $1,600 $53 $55 $47 Q1 '17 Q1 '18 Q1 '19 Q1 '20 Q1 '17 Q1 '18 Q1 '19 Q1 '20 * See Page 23 22
Slide 23: Penske Transportation Solutions
Penske Transportation Solutions • We own 28.9% of Penske Transportation Solutions • PTS total assets $15.9 billion • Q1 2020 PTS net income declined $42 million • Lower gains on sale of $20 million of used revenue earning equipment due to market conditions • An 11% decline in rental operations and l
Slide 24: Digital Initiatives
DIGITAL INITIATIVES
Slide 25: Digital/Omni-Channel Initiatives
Digital/Omni-Channel Initiatives • Over 56,000 new and used vehicles available online via websites and social channels • Nearly 50% of U.S. unit sales were from digital initiatives in the first quarter 2020 • Preferred Purchase online buying tool incorporating digital signing, remote id verification
Slide 26: Penskecars.com Site
Penskecars.com Site PENSKE: COM. gOOBr 8 Over 40 Brands. Nearly 40,000 Vehicles. New Cars & Trucks Used Cars & Trucks Locate A Dealership Careers Vehicle Shipping Employee / Partner Program Over 40 Brands-Nearly 40,000 Vehicles. It AltStarts-Here! Search Inventory 50 Miles From v: Zip Code ) a seron
Slide 27: Penskecars App
Penskecars App 2016 Bentley Flying Spur W12 NEW USED Sedan PENSKE: J PENSKECARS.. CARS CARS (ogni cnsprronrironil 4 Orel bene Ney ete wen SEARCH INVENTORY 2019 BMW 2 Series M240i CARS UNDER $15,000 — Enter Keyword(s) to Search: Convertible C<CXOqOqOAOA Example: 2013 Audi $4 (Or Browse by Category Li
Slide 28: CarSense
CarSense Cranberry, PA + CarSense ‘pur Closert Boome Shop Trade/Sell Finance About Gareers Service Stores om J) pe Start thesprocess Onlin = \ © 28
Slide 29: CarSense.com Mobile Version
CarSense.com Mobile Version 29
Slide 30: Sytner Buy-Online
Sytner Buy-Online € C @ sytner.co.uk/buy-online/ xk #16 Browse | Buy | Delivered OOSS Browse over 11,000 Value your part exchange Buy, reserve or apply Schedule delivery to vehicles online for finance your door* With our new buy online feature, you can easily reserve or purchase your next car withou
Slide 31: Non-GAAP Reconciliations
NON-GAAP RECONCILIATIONS
Slide 32: EBITDA Reconciliation
EBITDA Reconciliation The following table reconciles reported net income to earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the three ($ in Millions) months ended March 31, 2020 and 2019: 3 Mos. Ended March 31, 2020 2019 Net Income $51.5 $99.2 Depreciation $28.5 $26.4 O
Slide 33: Free Cash Flow Reconciliation
Free Cash Flow Reconciliation The following table reconciles net cash provided by continuing operating activities to free cash flow for the three months ended March 31, 2020 ($ In Millions) Net cash provided by continuing operating activities $ 212 Add: Net borrowings of floor plan notes payable 12
Slide 34: Automotive
Automotive
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