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OFFON

GROUP 1 AUTOMOTIVE, INC.

(GPI)
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3Q21 Financial Results and Company Overview - dated 10/28/2021

10/28/2021 | 07:23am EST

PARTS &

SERVICE

ONLINE

SHOPPING

Third Quarter 2021

Investor Presentation

October 28, 2021

BUY & SELL

FINANCE &

INSURANCE

CUSTOMER

SUPPORT

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, the economy and other future conditions. In this context, the forward-looking statements often include statements regarding our strategic investments, goals, plans, projections and guidance regarding our financial position, results of operations, business strategy, and often contain words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "should," "foresee," "may" or "will" and similar expressions.

While management believes that these forward-looking statements are reasonable as and when made, there can be no assurance that future developments affecting us will be those that we anticipate. Any such forward-looking statements are not assurances of future performance and involve risks and uncertainties that may cause actual results to differ materially from those set forth in the statements. These risks and uncertainties include, among other things: (a) board approval of future dividends; (b) general economic and business conditions; (c) the level of manufacturer incentives; (d) the future regulatory environment; (e) our ability to obtain an inventory of desirable new and used vehicles and impact of supply chain disruptions which occur from time to time; (f) our relationship with our automobile manufacturers and the willingness of manufacturers to approve future acquisitions; (g) our cost of financing and the availability of credit for consumers; (h) our ability to complete acquisitions and dispositions and the risks associated therewith; (i) foreign exchange controls and currency fluctuations; (j) our ability to retain key personnel; (k) the impacts of COVID-19 on our business; (l) the impacts of any potential global recession; and (m) our ability to maintain vehicle margins, implement and maintain expense controls, and maintain sufficient liquidity to operate.

For additional information regarding known material factors that could cause our actual results to differ from our projected results, please see our filings with the SEC, including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

Why Group 1?

  • Our consistent execution of operational growth and leverage generates strong earnings and free cash flow trajectory.
  • We consistently executed continued profitability and strong cash generation over two recessions and a pandemic.
    • The company has never lost money on an operating basis in ANY quarter.
    • Adjusted operating cash flow was $186M in 2Q20 (during the height of the pandemic and 2020 recession) and $117M in FY09 (during the 2008- 2009 recession).

owth despiteƒ Our state-of-the-artomni-channel platfo

a challenging economy. 68% growth in units sold through AcceleRide® for 3Q21 YoY.

  • The Company achieved record U.K. profits despite Brexit and the pandemic and is poised to benefit from U.K. market recovery and further consolidation in that market.
  • Among segment leaders in aftersales growth rate and cost structure.
  • #1 automotive retailer in the state of Texas - a very strong and growing economy benefitting from numerous corporate relocations, low taxes, and low regulation.
  • Very strong balance sheet with over $900M of immediate liquidity and a 1.5x rent-adjusted leverage ratio as of September 30, 2021.

Group1Auto.com - Investor Presentation, 3Q21

ADJ. FCF

($MM)

ADJ. EPS

+25.5%

CAGR

REVENUE

+20.6%

($MM)

CAGR

+1.5%

CAGR

2020

$10,852

$18.06

$426

2019

$12,044

$10.93

$237

2018

$11,601

$8.91

$200

2017

$11,124

$7.73

$184

2016

$10,888

$7.42

$170

2015

$10,633

$6.87

$137

2014

$9,938

$5.87

$109

Page 3

Traditional

Business Mix

Parts & Service is the heart of our business model and generates ~45% of total gross profit.

Parts & Service has traditionally only declined around mid-singledigits during a recession, which provides stable, high-margin performance to help offset the cyclical nature of new vehicle sales.

*May not add to 100% due to rounding, based on 2019 full-year results.

Group1Auto.com - Investor Presentation, 3Q21

Revenue*

Gross Profit*

4%

13%

27%

31%

Finance & Insurance

Parts & Service

45%

Used Vehicles

52%

New Vehicles

11%

17%

Page 4

Page 3 of 20

Geographic Footprint

United States

15 States

New Hampshire (3)

120 Dealerships

Boston (5)

Cape Cod (2)

78% of New Vehicle Unit Sales*

Philadelphia (1) Atlantic City (3)

Sacramento (2)

Annapolis (2)

Kansas City (3)

Charlotte (1)

Los Angeles (2)

Santa Fe (3)

Amarillo (1)

Tulsa (4)

Augusta (1) Columbia (1)

San Diego (1)

Albuquerque (3)

Oklahoma City (9)

Atlanta (2)

Hilton Head (1)

Lubbock (6)

Dallas-Ft Worth (10)

Columbus (4)

El Paso (6)

Shreveport (1)

Mobile (2)

Pensacola/

Panama City (3)

Beaumont (6)

Austin (6)

Gulfport (1)

San Antonio (4)

New Orleans (3)

Worldwide

Houston (17)

Miami (1)

191 Dealerships

248 Franchises

49 Collision Centers

33 Brands

*Dealership count as of October 28, 2021; New Vehicle Unit Sales YTD as of September 30, 2021.

Group1Auto.com - Investor Presentation, 3Q21

United Kingdom

England

55 Dealerships

18% of New Vehicle Unit Sales*

London

Brazil

Paraná, São Paulo, & SantaCatarina

16 Dealerships

4% of New Vehicle Unit Sales*

São Paulo

Paraná

Santa Catarina

Page 5

Economic Reasons to

Operate in Texas

A best-in-class business climate delivers results!

Low taxes, reasonable business regulations and a very affordable cost of living add up to an economic slam dunk for business owners and operators.

GP1 Locations in Texas

37% of 3Q21 Total New Vehicle Unit Sales

Amarillo (1)

Houston

16%%

Dallas-Ft Worth

Dallas-Ft Worth (10)

5%

Lubbock (6)

Austin

5%

El Paso (6)

Austin (6) Beaumont (6)

Lubbock-

4%

Amarillo

San Antonio (4)

Houston (17)

San Antonio

3%

El Paso

2%

Note: Dealership counts

Beaumont

2%

as of October 28, 2021.

The fastest-growing cities in America remain in Texas. According to WalletHub, eight of the 30 fastest-growing cities in the country are in The Lone Star State-of which six cities made the top 20 list.1

Chief Executive Magazine has named Texas the Best State for Business in 2021 for the 17th consecutive year; and Forbes has ranked Texas as the No. 1 as for Growth Prospects.2

From 2012 through present, Texas has led the nation in the number of corporate facility expansion projects, as measured and reported by Site Selection Magazine.2

For 2021, 49 of Fortune 500's companies choose Texas as their home base. Outside of energy, examples include McKesson, AT&T, Dell Technologies, Sysco, Oracle, USAA, Hewlett Packard, Kimberly-Clark, American Airlines, Yum! Brands, and dozens more. So do many foreign companies, such as Toyota, BAE Systems, Siemens and Shell Oil. HP, Tesla, and Oracle have all announced they are relocating their HQ from CA to TX. Group 1 is #286. 2,3

Texas also ranks as the No. 1 exporting state in the nation and has for 19 consecutive years, according to the Observatory of Economic Complexity and State of Texas.4,6

"Talent has always been in Houston, which ranks first in the U.S. for tech workers in non-tech companies, according to a Cyberstates study in April 2021."5

As of 2021, if Texas were a country, it would rank as the 9th largest economy in the world based on GDP, ahead of Australia, Brazil, Mexico, Spain, Russia and many others.7

Page 4 of 20

Total Consolidated New Vehicle Brand Mix 3Q21 YTD

The Company's brand diversity allows it to reduce the risk of evolving consumer preferences.

22%

12%

8% 8% 7% 7% 6% 5% 5% 5% 4% 4%

2% 2% 1% <1% 1%

Other

*May not add to 100% due to rounding.

Group1Auto.com - Investor Presentation, 3Q21

Page 7

Growth Strategy

ƒ First priority for capital allocation is growing the company through acquisitions

Acquisitions

ƒ $4.1 Billion in acquired revenues 2014-2021 YTD

ƒ Fragmented U.S. market - top 10 dealer groups sell ~10% of industry units

ƒ Business model generates strong adjusted free cash flow to fund growth ($426M in 2020)

ƒ 9/30/21 immediate liquidity of $914 million including U.S. acquisition line

ƒ Leverage of 1.5x leaves plenty of cushion for additional debt borrowings if needed

ƒ Heart of the business model which historically contributes ~ 45% of gross profit

Parts & Service

ƒ GPI led the peer group in 2019 with U.S. same store gross profit growth of 9.5%

ƒ Aftersales has returned to continued growth from pre-pandemic levels

ƒ Unique 4-day work week and centralized call center initiatives driving growth

ƒ Increasing vehicle complexity (including electric vehicles) continues to favor franchised dealers

Used Vehicles

ƒ Stable market with ~37M units sold in 2020 according to NADA

ƒ Very fragmented market with franchised dealers having < 40% market penetration

ƒ GPI grew U.S. same store used retail units by 8% in 2019

ƒ Franchised dealers have supply advantage through NV trade-ins, lease returns, OEM closed auctions, and service lane marketing

Digital Retail

ƒ AcceleRide® digital platform with 68% YoY growth in 3Q21

ƒ Customers using AcceleRide® close at a significantly higher rate than non-digital customers

ƒ All the functionality of the used-only online retailers

ƒ Allows for a materially lower cost structure

Group1Auto.com - Investor Presentation, 3Q21

Page 8

Page 5 of 20

Disclaimer

Group 1 Automotive Inc. published this content on 28 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 October 2021 11:22:05 UTC.


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Sales 2021 13 702 M - -
Net income 2021 608 M - -
Net Debt 2021 1 981 M - -
P/E ratio 2021 5,22x
Yield 2021 0,69%
Capitalization 3 133 M 3 133 M -
EV / Sales 2021 0,37x
EV / Sales 2022 0,30x
Nbr of Employees 12 337
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Number of Analysts 8
Last Close Price 179,21 $
Average target price 258,43 $
Spread / Average Target 44,2%
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Managers and Directors
Earl Julius Hesterberg President, Chief Executive Officer & Director
Daniel James McHenry Finance Director
Stephen D. Quinn Independent Non-Executive Chairman
James R. Druzbik Vice President-Information Systems
Mary Ann Wright Independent Director