Dealership Operations - As of June 30, 2021, the company operated 117 dealerships in the U.S., 48 in the U.K., and 16 in Brazil[92]. - The company acquired two Toyota dealerships in the U.S. and seven dealerships in the U.K. in 2021, with expected aggregate annualized revenues of $420 million from these acquisitions[96]. - The company focuses on strategic acquisitions to enhance dealership performance and capitalize on economies of scale in the U.S., U.K., and Brazil[95]. Sales Performance - During Q2 2021, U.S. total online retail unit sales increased by 111.3% compared to the same period in 2020[98]. - New vehicle retail sales increased to $1,855.3 million, a 74.6% increase compared to $1,062.7 million in the same quarter of 2020[111]. - Used vehicle retail sales rose to $1,195.6 million, reflecting an 86.5% increase from $641.2 million year-over-year[111]. - Total revenues reached $3,700.4 million, marking a 73.6% increase from $2,131.2 million in the prior year[111]. - Retail new vehicles sold reached 42,893 units, a 62.0% increase from 26,472 units sold in the same quarter of 2020[111]. - Used vehicle wholesale sales grew by 31.6% to $176.0 million, indicating strong demand in the wholesale market[114]. Financial Performance - Total gross profit increased to $661.3 million, an 84.3% rise compared to $358.8 million in the previous year[111]. - Gross profit for new vehicle retail sales surged to $165.3 million, a 159.2% increase from $63.8 million in the same quarter last year[111]. - SG&A expenses increased to $376.7 million, up 58.8% from $237.2 million in the same quarter of 2020[111]. - The gross margin for total revenues improved to 17.9%, compared to 16.8% in the same quarter last year[111]. Inventory Management - New vehicle days' supply of inventory decreased to approximately 20 days, down from 52 days at the end of December 2020 and 61 days at the end of June 2020[106]. - The new vehicle inventory stood at a 16 days' supply, which was 48 days lower than the same period last year[119]. Cost Management and Efficiency - The company emphasizes cost management and productivity improvements across sales and service departments to enhance operational efficiency[102]. - The company implemented a four-day work week for service technicians and advisors, resulting in increased retention and expanded service capacity without additional capital investment[99]. - Total same store SG&A as a percentage of gross profit decreased from 62.5% in Q2 2020 to 55.8% in Q2 2021, indicating improved productivity and higher vehicle margins[120]. Digital Initiatives - The company is leveraging digital initiatives to improve customer experience and streamline operations, including the rollout of AcceleRide® to U.K. dealerships[98]. - The introduction of "Sell A Ride" on the AcceleRide® platform allows customers to receive cash offers for used vehicles within 30 minutes, enhancing inventory acquisition[100]. Diversity and Inclusion - The company is committed to diversity, equity, and inclusion through a dedicated council and ongoing training programs for employees[104]. Market Outlook - Future growth priorities include increasing sales penetration in the digital retailing platform AcceleRide® and expanding market share in the used vehicle business[94]. - The company cannot predict the future impact of the COVID-19 pandemic on its business, despite significant recovery in operations[105]. Cash Flow and Liquidity - Total cash on hand as of June 30, 2021, was $198.7 million, excluding $326.1 million used to pay down the U.S. Floorplan Line[163]. - Net cash provided by operating activities for the six months ended June 30, 2021, was $752.1 million, an increase of 9.3% from $688.2 million in the same period in 2020[167]. - As of June 30, 2021, total available liquidity was $779.5 million, consisting of $198.7 million in cash and $580.8 million in additional borrowing capacity[180]. Tax and Interest Expenses - Provision for income taxes increased significantly by $60.4 million, or 284.1%, reaching $81.7 million for the six months ended June 30, 2021[156]. - Floorplan interest expense decreased by $6.6 million, or 28.8%, for the six months ended June 30, 2021, compared to the same period in 2020[158].

Financial Data and Key Metrics Changes - Group 1 generated adjusted net income of $190 million, equating to adjusted earnings per share of $10.31, an increase of 173% year-over-year and 264% compared to Q2 2019 [9][10] - Adjusted SG&A as a percentage of gross profit was 55.9% in the U.S., 63.4% in the U.K., and 68.8% in Brazil, showing significant cost control improvements [14] Business Line Data and Key Metrics Changes - U.S. same-store new and used sales increased by 11% and 12% respectively compared to Q2 2019 [15] - Aftersales gross profit in the U.S. increased by 17% compared to Q2 2019, indicating strong recovery in aftersales business [18] - In Brazil, despite a nearly 50% decline in retail units sold versus Q2 2019, margins grew across all lines of business, achieving the lowest SG&A as a percentage of gross profit in the region's history [25] Market Data and Key Metrics Changes - U.K. retail sales saw a 31% sequential increase from Q1 2021, driven by pent-up demand from Brexit and the pandemic [13] - Aftersales revenues in the U.K. increased sequentially throughout the quarter, with June seeing an 11% same-store increase over June 2019 [12] Company Strategy and Development Direction - The company is focused on external growth through acquisitions, having recently acquired 9 franchises in the U.K. expected to contribute approximately $300 million in annual revenues [30] - The company is prioritizing digital retailing through its Acceleride platform, which sold a record 5,600 vehicles in Q2, more than double the prior year [20] Management's Comments on Operating Environment and Future Outlook - Management noted strong consumer demand for vehicles and expects this trend to continue into the third quarter and beyond, assuming no material changes in demand [11] - There are concerns about the ongoing inventory challenges due to supply chain issues, with expectations that new vehicle inventories will remain tight for the foreseeable future [52][53] Other Important Information - The company reported total cash liquidity of $525 million and an additional $255 million in borrowing capacity, indicating a strong financial position [26] - The quarterly floorplan interest expense decreased by 13% year-over-year, reflecting improved financial management [29] Q&A Session Summary Question: Impact of Ford's order-to-build model on inventory - Management expressed that a leaner distribution system would reduce inventory carrying costs and land requirements, which would be beneficial for the dealer group [32][33] Question: Differences in F&I per unit between U.S. and U.K. - Management acknowledged legal and market differences but indicated potential for improvement in the U.K. market [36][37] Question: Sustainability of SG&A savings - Management indicated that SG&A savings are expected to be sticky, with no significant changes anticipated in Q3 performance [39] Question: Future acquisitions and capital allocation - Management stated that while M&A remains a priority, share buybacks could be considered if acquisition opportunities do not meet financial return hurdles [61] Question: Inventory supply and sustainability of momentum - Management confirmed that new car inventories remain lean, while used car inventories are in better shape due to new sourcing practices [65] Question: Agency model implications in the U.K. - Management discussed potential agency model discussions with OEMs, noting that it could lead to a demand-pull system beneficial for retailers [69] Question: Pent-up demand in parts and service - Management sees significant pent-up demand and is transitioning back to a 4-day work week to expand capacity [49] Question: Feedback on F-150 Lightning - Management reported high customer interest in the F-150 Lightning across their Ford stores [81] Question: Impact of potential corporate tax rate increase - Management estimated a blended tax rate could rise to around 27% if the corporate tax rate increases [83]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-13461 Group 1 Automotive, Inc. (Exact name of registrant as specified in its charter) (State of other jurisdiction of incorporation or organ ...

Group 1 Automotive, Inc. (NYSE:GPI) Q1 2021 Earnings Conference Call April 29, 2021 10:00 AM ET Company Participants Pete DeLongchamps – Senior Vice President-Manufacturer Relations, Financial Services and Public Affairs Daryl Kenningham – President-U.S. and Brazilian Operations Daniel McHenry – Senior Vice President and Chief Financial Officer Earl Hesterberg – President and Chief Executive Officer Conference Call Participants Michael Ward – Benchmark John Murphy – Bank of America Rick Nelson – Stephens Ra ...

G R O U P 1 AUTOMOTIVE® 2021 First Quarter Financial Results & Overview April 29, 2021 PARTS & SERVICE BUY & SELL ONLINE SHOPPING FINANCE & INSURANCE CUSTOMER SUPPORT GPS 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 ...

Financial Performance - In 2020, total revenues decreased by 9.9% compared to 2019, with gross margins increasing from 15.1% to 16.3%, resulting in a decline in total gross profit of only 2.6%[125] - Total revenues decreased by 11.0% to $10,605.0 million in 2020 from $11,912.9 million in 2019[143] - New vehicle retail sales fell by 12.7% to $5,463.0 million, while used vehicle retail sales decreased by 9.2% to $3,023.6 million[143] - Gross profit for total revenues declined by 3.7% to $1,730.1 million, with a gross margin of 16.3% compared to 15.1% in the previous year[143] - Retail new vehicles sold decreased by 17.9% to 137,302 units, and retail used vehicles sold fell by 12.6% to 136,865 units[143] - Total gross profit in the U.S. decreased by $8.8 million, or 0.6%, while same store gross profit decreased by $23.1 million, or 1.6%[152] - Total gross profit in the U.K. decreased by $19.6 million, or 7.3%, for the year ended December 31, 2020, compared to 2019[154] - Total gross profit in Brazil decreased by $18.7 million, or 34.9%, with a gross margin increase from 12.0% to 13.9%[160] Sales and Market Trends - The annual new light vehicle unit sales in the U.S. decreased by 14.8% to 14.5 million units in 2020 compared to 2019, while new vehicle registrations in the U.K. and Brazil decreased by 29.4% and 26.6%, respectively[124] - The company expects sustained improvements in industry sales volumes in 2021 as all three markets recover from the pandemic[124] - New vehicle retail same store revenues decreased by 17.7%, with a 23.3% decline in unit sales partially offset by a 7.2% increase in average sales price per unit sold[157] Cost Management and Expenses - SG&A expenses reduced by 14.6% to $1,143.0 million, resulting in SG&A as a percentage of gross profit at 66.1%[143] - SG&A expenses decreased by $128.5 million, or 12.0%, reflecting cost management efforts[151] - Total SG&A expenses in the U.K. decreased by $45.6 million, or 19.3%, for the year ended December 31, 2020, compared to 2019[154] - Total SG&A expenses in Brazil for the year ended December 31, 2020, decreased by $14.9 million, or 32.4%, with same store SG&A expenses down $14.2 million, or 31.3%[165] Impairments and Charges - The company recorded goodwill impairment charges of $10.7 million in the Brazil reporting unit due to the impact of the COVID-19 pandemic[133] - Impairments of intangible franchise rights were recorded at $20.8 million in 2020, compared to $19.0 million in 2019, due to the adverse impact of the pandemic[134] - The company recorded a goodwill impairment charge of $10.7 million in the Brazil region for the year ended December 31, 2020, with no impairments in 2019 and 2018[93] Cash Flow and Liquidity - Cash liquidity as of December 31, 2020, was $263.7 million, including $87.3 million in cash on hand and $176.4 million in immediately available funds[126] - Net cash provided by operating activities was $805.4 million for the year ended December 31, 2020, with adjusted net cash flow of $503.7 million[185] - The company had a working capital surplus of $161.5 million as of December 31, 2020, an increase of $67.4 million from the previous year[187] Debt and Financing - The company issued $550.0 million in 4.00% Senior Notes, which are expected to lower annual interest expense by approximately $5.5 million[197] - The company fully redeemed $550.0 million of 5.00% Senior Notes and $300.0 million of 5.25% Senior Notes, recognizing losses on extinguishment of $3.3 million and $10.4 million respectively[197][198] - Total contractual obligations as of December 31, 2020, amounted to $3,207.2 million, with $1,255.9 million due within one year[206] Operational Risks and Challenges - The company experienced a material adverse impact on its business due to the COVID-19 pandemic, affecting all markets in the U.S., U.K., and Brazil, starting from mid-March 2020[96] - The company faces substantial competition in automotive sales and services, impacting sales volumes and margins[88] - The company is subject to risks from economic downturns, including declines in vehicle sales and increases in interest rates, which could adversely affect manufacturers and, in turn, the company[83] Regulatory and Compliance Issues - The company is subject to numerous laws and regulations regarding data protection, which could pose compliance risks[99] - Compliance with automotive laws and regulations is critical, as violations may lead to administrative, civil, or criminal penalties[105] - Environmental laws impose obligations that may result in significant costs and liabilities for the company[107]

Financial Data and Key Metrics Changes - Group 1 Automotive achieved record adjusted net income of $334 million for the full year 2020, a $130 million increase, representing a 64% improvement over 2019 [10] - Adjusted earnings per share reached $18.06, an increase of 65% [10] - For Q4 2020, adjusted net income was $104 million, translating to adjusted earnings per share of $5.66, an 88% increase year-over-year [14] - Adjusted SG&A was reduced by $179 million, with SG&A as a percentage of gross profit decreasing by 810 basis points to a record 65.8% [11] Business Line Data and Key Metrics Changes - In the U.S., same-store new vehicle unit sales decreased by 6%, while used vehicle retail unit sales decreased by 10% compared to the prior year [20] - New vehicle inventory levels finished the year at 48 days supply, down nearly 8,000 units from December 2019 [21] - Same-store F&I gross profit increased by 2%, with same-store F&I PRU growth of $190 to $2,027 [22] - Customer pay gross profit was up for the quarter, indicating recovery in the after-sales business [23] Market Data and Key Metrics Changes - In the U.K., dealership showrooms were closed for 41 of the 92 days in the quarter due to lockdowns, yet profitability was maintained in each month [17] - The U.K. experienced strong results in October, continuing substantial year-over-year growth from Q3 [16] - Brazil faced a 10% decline in new vehicle industry sales, but margins improved significantly, with SG&A as a percentage of gross profit at 75% [31] Company Strategy and Development Direction - The company aims to pursue external growth through acquisitions, with a preference for the U.S. market while remaining open to opportunities in foreign markets [38][44] - The focus is on maintaining a leaner operating structure and leveraging technology to improve efficiency [12] - The company has restructured its U.K. operations to centralize support functions, which has led to record profits in that region [18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth prospects, citing several years of new vehicle industry growth ahead and a recovery in service business as lockdowns end [46] - The company plans to retain a significant portion of cost reductions achieved during the pandemic [12] - Management acknowledged the challenges posed by COVID-19 but highlighted the resilience of the business and the ability to adapt to changing conditions [17][60] Other Important Information - The company generated $145 million of adjusted cash flow in Q4 2020, bringing total adjusted operating cash flow for the year to $504 million [35] - Total cash liquidity reached $263 million, with additional borrowing capacity of $284 million [33] - The company disposed of underperforming assets and has been awarded two Toyota open points in Brazil, expected to activate in the first half of the year [42] Q&A Session Summary Question: What is shifting in the acquisition strategy? - Management indicated that financial stability and improved clarity on market conditions allow for more aggressive external growth, targeting $1 billion in annualized revenue through acquisitions [51] Question: What is the expected SG&A to gross ratio going forward? - Management expects to maintain a SG&A to gross ratio significantly below 70%, aiming for continued efficiency improvements [83] Question: How has the U.K. lockdown affected operations? - Management noted that while lockdowns have depressed service traffic, there is pent-up demand expected to surge once restrictions are lifted [62] Question: What is the outlook for acquisitions in the current environment? - Management acknowledged a competitive landscape for acquisitions but emphasized the importance of maintaining financial discipline and ensuring accretive deals [104] Question: How does the company view the direct-to-consumer model of EV start-ups? - Management believes that while direct sales work for some start-ups, the dealership network provides significant advantages in customer service and inventory management as demand stabilizes [96]

Retail Network and Sales Performance - As of September 30, 2020, the retail network consisted of 119 dealerships in the U.S., 50 in the U.K., and 17 in Brazil[111] - New and used retail unit sales in the U.S. dropped approximately 50% in March 2020 compared to the same period in 2019, but began to recover in May 2020[119] - U.K. vehicle sales were significantly impacted by a government-mandated shutdown, resulting in approximately 35% of contracted vehicle deliveries not being fulfilled by the end of March 2020[121] - In the third quarter of 2020, U.K. operations showed a significant recovery, contributing positively to quarterly financial results, with revenues and margins increasing compared to the prior year[121] - Retail new vehicles sold decreased by 5,237 units, a decrease of 11.8%, totaling 39,152 units[131] - Retail new vehicles sold decreased by 15,737 units, or 17.6%, while retail used vehicles sold decreased by 10,135 units, or 11.2%[144] - Retail new vehicles sold decreased by 5,158 units, or 15.7%, while retail used vehicles sold decreased by 4,038 units, or 12.9%[138] Financial Performance and Revenue - Total revenues for the three months ended September 30, 2020, were $3,039.6 million, a decrease of 2.5% from $3,118.3 million in the same period of 2019[129] - Total revenues for the three months ended September 30 decreased by $123.5 million, or 4.0%, to $2,973.2 million[131] - Total revenues decreased by $1,175.0 million, or 13.3%, from $8,822.6 million to $7,647.6 million[134] - Total revenues in the U.K. for the three months ended September 30, 2020 increased by $156.2 million, or 26.7%, compared to the same period in 2019[151] - Total revenues in Brazil decreased by $56.6 million, or 51.1%, for the three months ended September 30, 2020, compared to the same period in 2019[165] - Total revenues in Brazil decreased by $143.5 million, or 43.9%, for the nine months ended September 30, 2020, compared to the same period in 2019[172] Gross Profit and Margins - The gross margin for total revenues improved to 16.8% in Q3 2020, compared to 14.9% in Q3 2019[129] - Gross profit increased by $39.5 million, an 8.6% rise, reaching $500.8 million[131] - Total gross profit fell by $81.9 million, or 6.1%, from $1,335.5 million to $1,253.6 million[134] - Total gross profit in the U.K. for the three months ended September 30, 2020 increased by $22.5 million, or 34.6%, compared to the same period in 2019[152] - Total gross profit in Brazil decreased by $5.0 million, or 36.6%, for the three months ended September 30, 2020, compared to the same period in 2019[166] - Total same store gross margin increased by 130 basis points, primarily due to higher new and used vehicle retail and wholesale margins[145] Cost Management and SG&A Expenses - SG&A expenses decreased by $49.7 million, a reduction of 14.3%, totaling $298.9 million[132] - SG&A expenses decreased by $162.5 million, or 16.2%, from $1,005.9 million to $843.4 million[134] - Total same store SG&A expenses decreased by $112.4 million, or 14.0%, for the nine months ended September 30, 2020[146] - Total SG&A expenses in the U.K. decreased by $3.9 million, or 6.8%, compared to the same period in 2019, with a constant currency decrease of 12.1%[153] - SG&A expenses as a percentage of gross profit decreased from 86.5% in Q3 2019 to 60.6% in Q3 2020[153] Strategic Initiatives and Future Outlook - The company aims to expand the "Val-U-Line®" sales program to increase used retail volume by targeting a growing customer niche[114] - The company continues to evaluate strategic acquisitions and dispositions to enhance its dealership portfolio and improve profitability[117] - The company expects used vehicle and service operations to return to near prior year levels in Q4 2020, despite uncertainties in new vehicle inventory levels[124] - The long-term impact of the COVID-19 pandemic remains uncertain, particularly with new lockdowns in the U.K. affecting vehicle sales[124] Impact of COVID-19 - The impact of the COVID-19 pandemic led to significant reductions in operating capacity, with service repair orders declining by approximately 50% in late March 2020[119] - The company furloughed or terminated approximately 8,000 employees in early April 2020, but U.S. and U.K. headcounts have since returned to about 75% of pre-COVID levels[123] - The company implemented cost reduction strategies to mitigate the negative impact of lower gross profit, including $1.2 million in severance costs due to redundancy[160] - The government mandated closure of all U.K. dealerships from March 21, 2020, to June 1, 2020, significantly impacting operations[157] Cash Flow and Liquidity - The company generated $712.7 million of net cash flows from operating activities for the nine months ended September 30, 2020, compared to $310.8 million for the same period in 2019, representing a 129.3% increase[195] - As of September 30, 2020, the company had total cash liquidity of $192.9 million and an additional $273.1 million of borrowing capacity on its Acquisition Line, bringing total immediate liquidity to $466.0 million[213] - The company announced a $200 million share repurchase program on October 6, 2020, indicating sufficient liquidity and no anticipated material liquidity constraints[123] Interest Expense and Tax Provision - Floorplan interest expense decreased by 47.1% for the three months ended September 30, 2020, compared to the same period in 2019[182] - Provision for income taxes increased by $23.6 million to $34.6 million for the three months ended September 30, 2020, and by $17.4 million to $55.8 million for the nine months ended September 30, 2020, primarily due to increases in pretax book income[186] - The effective tax rate decreased to 21.5% for the three months ended September 30, 2020, from 22.3% in the same period in 2019, and to 23.1% from 23.4% for the nine months ended September 30, 2020[186]

Financial Data and Key Metrics Changes - Group 1 Automotive reported an all-time record adjusted net income of $129 million for Q3 2020, translating to adjusted earnings per share of $6.97, a 131% increase compared to the prior year's adjusted earnings per share [10] - The adjusted profit results exclude a $3.3 million pre-tax loss related to the redemption of previously issued notes [11] - The company achieved significant profit improvement due to large new and used vehicle margin improvements and substantial cost leverage [12] Business Line Data and Key Metrics Changes - In the UK, same-store new vehicle sales increased by 11% and used vehicle sales rose by 14%, with a 26% increase in same-store gross profit on a local currency basis [15][16] - In the U.S., same-store new vehicle unit sales decreased by 16% and used vehicle unit sales decreased by 13% due to tight inventory levels [19] - New vehicle margins per unit improved by 14%, while used vehicle margins surged by 90% [17] Market Data and Key Metrics Changes - U.S. new vehicle inventories finished the quarter at approximately 17,000 units, equating to a 52-day supply [19] - The UK market has shown recovery, with parts and service revenue increasing by 4% in local currency during Q3 [16] - Brazil experienced a 22% decline in new vehicle industry sales, but the company managed to grow margins and reduce costs effectively [28] Company Strategy and Development Direction - The company is focusing on M&A to add scale, with a preference for the U.S. market but open to foreign acquisitions [34] - A digital retailing initiative, AcceleRide, has been launched to enhance customer experience and drive sales [26] - The company has implemented a major restructuring of its UK operations to improve sales and service efficiency by at least 20% [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery in vehicle sales, citing strong demand and low interest rates as positive factors [52] - The company anticipates that the current high margins will continue until inventory levels normalize [42] - Management acknowledged the challenges of growing EPS in 2021 but identified potential areas for improvement, including service business recovery and UK operations [58][59] Other Important Information - The company redeemed all $550 million of its outstanding 5% notes due in 2022, funded by newly issued 4.00% notes due in 2028, saving over $15 million in annual interest expense [29][30] - As of September 30, the company had $66 million in cash and $127 million in floorplan offset accounts, totaling $193 million in cash liquidity [31] Q&A Session Summary Question: Can you discuss the impact of tight inventory on profitability? - Management acknowledged that tight inventory leads to lost sales, particularly with their largest brand, Toyota, experiencing significant inventory constraints [39] Question: How sustainable is the current performance given inventory challenges? - Management indicated that while inventory replenishment is slow, high margins are being maintained due to disciplined pricing strategies [41] Question: What is the outlook for service business recovery? - Management noted that customer pay gross profit has returned to previous levels, indicating a potential recovery as miles driven increase [74] Question: How does the company view the potential for acquisitions? - Management expressed confidence in the company's financial strength and stability, which supports a renewed focus on M&A opportunities [54] Question: What is the expectation for used vehicle supply and its impact on volumes? - Management expects used vehicle supply to improve as new vehicle sales increase, which will enhance trade-ins and overall inventory levels [78]

United States ited Kingdom GROUP 1 AUTOMOTIVE® 'VALUE DRIVEN' J.P. Morgan Auto Conference August 11, 2020 NYSE Forward Looking Statement 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 s ...