PAG - Earnings call transcript Q1 2021 | Penske Automotive Group, Inc.

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Operator

Good afternoon, ladies and gentlemen. Welcome to the Penske Automotive Group First Quarter 2021 Earnings Conference Call. Today’s call is being recorded and will be available for replay approximately one hour after completion through May 5, 2021, on the Company’s website under the Investors tab at www.penskeautomotive.com. I will now introduce Anthony Pordon, the Company’s Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Anthony Pordon

Maria. you, Thank and everyone, you joining for Good also today. us afternoon, thank our Group’s detailing morning XXXX on the a Company’s release in press assist first designed and along to presentation Penske posted results. this A understanding issued Automotive quarter you with was financial is website results

any As always, for I’m may you phone by questions available have. email or follow-up

Controller. Joining Officer; and Financial J.D. Carlson, me Chief for today’s Hulgrave, call Corporate are Roger Penske, Chairman; Shelley

events, growth Our discuss may future earnings forward-looking potential, business about of statements certain measures such also operations, liquidity discussion as interest, our plans, conditions. or amortization, earnings today include EBITDA. and financial may assessment and before outlook We depreciation taxes, non-GAAP

GAAP website We directly presentation, and reconciled and measures. investor have measures to comparable are GAAP press have comparable the on available the release prominently which presented most our measures in the non-GAAP this morning’s

because direct could vary release, to and may to discussion I expectations. which results to that our XX-K, turn and our for over factors differ cause additional results Form outlined press Roger. differ the the may actual of would actual results now SEC filings, I you in call from today’s materially. including cause risks Our to materially uncertainties

Roger Penske

driven continuing thank Thank increased their Company’s XXX% business earnings reduction of for levels to inventory afternoon. costs all-time to Penske by our you, largely record year. XXX%, increased the continuing $X.XX. growth in before strength to expense increased earnings XXX% taxes Good Penske to same from operations when operations by from per and the our time dealerships due model. from you per earnings XXX% and while lower unit diversified afternoon, related to The first and XXX%, Automotive to leverage $XXX.X higher report improved for demonstrating the investment and and Tony. joining this quarter debt truck retailed, pleased lower commercial $XXX.X Solutions gross Further, us everyone, share I’m our an Group. was the million, income Income Transportation profitability last compared increased overall interest in a profit million,

same-store increased X.X% unit quarter, to the XXX,XXX. retail For sales automotive

New entire digital UK in for is development and down the UK UK. the U.S., tools in used due Despite up centers closed we UK. XX.X% and being XX.X% up XX.X% was dealership X.X% deliver U.S., new restrictions, showroom team Used the quarter. the the XX,XXX first our for and COVID in the were business quarter vehicles in up to the used to and the is in market

fact, same-store first nearly which the the unit in declined market, outperforming increased sales In our UK X% quarter, the XX%. UK during substantially

Same-store up a same-store X%. XX% revenue used, $X.X was profit unit SG&A to the improvement per the of $XXX retail gross driving basis-point continued a increased percent XX%; XXX profit as discipline, up increased including Retail for or XX%; with in in up automotive Parts, increase automotive particularly XX%; and I’m gross to a expense F&I, profit pleased variable quarter. revenue. Our Service gross & $X,XXX. XX% retail new XX% total billion, increased automotive up same-store XX%;

to on SuperCenters. Vehicle CarShop, move me Let our Used

to from on As a during the now many in And renamed basis. the UK. quarter, operate Used know, in end We at locations locations of and the U.S. least and new the opportunity. one currently open brand U.S. Vehicle growth and operate the CarShop year, XX the future of significant a expect you X by SuperCenters X year. we quarter and SuperCenters this we second operate to the global locations more represents CarSense business This CarShop,

the closures. increase internal XX,XXX volume as and showroom variable the decline portal. Despite rate sourcing volume in was gross dealership SuperCenters by the including we by a UK increased from of per rates sold showrooms as forecasting the During in proprietary in the impacted U.S. unit monthly our XX, using XX% first COVID-related profit our vehicle franchise decline the X,XXX a UK, the the units, CarShop reopening unit we’re quarter, a increasing on Based purchased transfer April of since units. on run UK the online trade-ins of improved XX% current sales

and me and Let XX, XX the Canada. Kansas turn heavy-duty We the on dealership. to truck operate of Freightliner April commercial dealerships to medium now retail completed truck and acquisition in City U.S.

million We revenue. annualized expect $XXX this acquisition in to add

sold QX, million $XXX in we return revenue sales. earned and generating X,XXX trucks, During on used and new X.X%

the represented time was XX% our absorption stronger the month XXX%. due our truck & the was QX our of conditions. best increased XXXX group. used in same margin to total Service last fixed cost operations market fixed in March year and third gross and of truck history versus operation New Parts profit

truck a commercial from these $XX.X As result of increased our dealerships profitability items, XXX% million. to

retail while March March the XX%. units, when year. heavy-duty order During North At was last Class increase quarter, X net XXst Class the represents sales orders backlog at X XXX,XXX first to XXst, compared which increased truck XXX% increased XXX%, a American

result, approximately XXX,XXX in forecasting for sales year. truck a North retail ACT Research units last compared to the XXX,XXX As X is a increase to market American XX% Class

truck provide ‘XX will our the in in to tailwinds expect business commercial and and We leasing strong ‘XX. market truck

with revenue a savings. Transportation own $XXX cash in X% Penske million and total and provides which XX.X% of XXX,XXX PTS or $X.X cash billion QX, of PTS, generated on fleet that sales. us return In income, vehicles distributions currently We Solutions. income equity Turning of to operates

our were demand and leasing very and business. As a sales strong, XX% remains particularly increased XXX% consumer equity result, earnings and million. in rental our X%, rental increased $XX.X to up Full-service contract

to for American the Black sale is market. $XXX last acquisition, revenue year truck it is recent Class the Horse Carriers at stronger which than to heavy-duty used X in resurgence of North the logistics Our contribute XX%, was in of time increased annualized expected XXXX. million on additional gain business including this The much trucks PTS due

at $X.X notes of five-year finance PTS Lastly, increasing rate X.X% within has an in of billion six levels or average business. issued the last months,

down our December $X.X billion is billion, automotive Retail at XXXX. and March balance which $X.X balance Total XXXX. million from sheet of $X of shape. inventory to inventory remains compared December billion $X.XX great billion is approximately in down Looking from is sheet. $XXX and The when strong in

vehicle inventory New and is down most for million brands. in short supply $XXX remains

down was this systems Used expect short We million. truck and supply up to vehicle was inventory power continue. million. $XX inventory Commercial $XX

days March, at XX.X% is at March, the At U.S. down to was Looking XX.X% under was compared the capitalization repayments XX and At credit XXXX. XX. XX.X% largely long-term debt million agreement. to XXst, of time the and new our debt supply, our from December days’ used end our was our same end at of $XXX in

improvement acquire times future ended from expansions. QX, at ratio sits the land our million quarter we XXXX. billion $XX agreements. CarShop in million $X under In leverage times, of We at credit the end for $X.X Our including an to capital invested approximately liquidity with X.X X.X first expenditures, in

Moving on initiatives. to digital our

on Our creating space. especially and our omnichannel focuses a customers, with connection in convenience approach the digital

drove to combination online, online. we Depending tools shopping In technologies. continue customers our our us quarter, purchase over and and model fully million either first any digital to on or customers website. marketing hybrid have new to their the XX including introduction of XX,XXX in-store for our the footprint, We of two. type enhance allows vehicles offer This needs, efforts visitors the can a grow specific and digital expand

and journey. at retailing retailed through £XX, in directly through In at XX% online. customers of instant proprietary digital UK, a unit apply trade-in during X,XXX for point the price a financing Our customer in is our offers implemented and any of called U.S. in platform, sales buying a their We purchase. purchase preferred tool receive for buying purchase buying the may their approval, pay and used U.S., customer some flexible car It’s or dealership every X% vehicles approximately reserve our credit preferred obtain preferred options, accommodating way guaranteed our journey.

or sales. of During our the in we quarter, channels through vehicles X,XXX UK XX% the unit sold these

XXX,XXX appointments business scheduled gain centers. online service Our scheduling were tools QX, service our to In online to over scheduled development continue and were XXX,XXX another momentum.

Additionally, more quarter. for XX% the which are increase of online saw over opting and payments, an more customers during we first

and combine have customer shorten online to the online service tools or perform we online U.S. to a allow the our part any to along to their when dealership. pay, UK, tools with the online scheduling, buying our So, in transaction the you visit the of

of add corporate at expected acquisition Looking development, in as noted, completed Kansas we the is City which revenue. annualized $XXX million previously Freightliner, to

and under January; new a automotive revenue. the are dealership which three which certified opened Texas, year, to dealerships Washington, add construction. dealership retail franchise a includes in will which in we Audi annualized Southern $XXX additional serving this both area, of in California; Porsche in second million Elite currently add another new are Honda metro This dealership D.C. Additionally, expected

also We CarShop SuperCenters. Used Vehicle to grow intend

in next plan locations CarShop the XXX,XXX have XX locations at to of increase doubling we With by the of additional to the opening started to expansion second our our of CarShop Nottingham We dealership end the growth XXXX. UK December, and phase plan two quarter the execute We two in locations open plan. plan we XX will of and to XXXX. the CarShop $X generate $X.X in business. footprint size billion the another of by from billion in that revenue, between sales least expect and current the unit time, total At the end in

Automotive at which operating million compares acquisition I’ll and continuing from all XXX commitment for to to and dealerships customer before call and Again, X% And before and the diversified I’d customer turn of the management sales, U.S. organic efficiencies on top-rated to operator. of lastly, year. Thank of of operations for of million. for billion recognition taxes X.X% the special to dealerships of you like finally, $X award our recently, targeting the we’re that joining end businesses, those care. approximately earn on to from CarShop growth employees to portfolio back today, the coupled CARFAX income their by And you. reviews. thanks taxes congratulate at look targeting drive as based generating $XXX every income return Penske XXXX, $XXX continuing last to to one ongoing it while with across operations our excellence and dealer awarded we a We’re least

Operator

from of Bank Our John first of Instructions] Murphy line of comes the America. question [Operator

John Murphy

new you’re points adds what we awarded going car a opening mean, in roughly standalone if mean, very aggressive you’ve year-to-date. stores. $XXX on acquisitions, aggressive got are that So, has way revenue on think The I I go. out, that I almost lot companies of been or the CarShop up four to that stores. going on store, very the just are used plus million a year think -- other building the you to long these others went new acquisitions, about that over there’s

ways different or different if I of You’re lot number making these about the the in how was investment just think here. acquisitions, asset curious, and getting making done versus intensity a lot in a you you’re we’re of growth. these decisions? channels come you’re credit And Because more year? kind just billion, for $X could lot but approaching and real this I a see that numbers, mean, these a getting are of not we

Roger Penske

number for Well, one, I is the not sure. over year think,

a want I don’t December certainly, have pointing PTS, on the We auto did XXst. truck we and on retail also on side of And Horse our million ownership, out, pipeline, to part the obviously, of miss $XXX both Black side.

market. multiples. on But, disciplined the the to we’re in we’re be going So,

buy I the of think, you right good now, high because margins. looks anything

got also have a brand, get use OEM think used CarShop, I capital we’ve a OEM our a the And mix, going versus online on more I your both physical get think returns, you’re if from -- on want from of car need case, of where when would car are there’s because margin, be we without the certainly that company total locations And adding inventory business, disciplined offline. a it’s i.e., OEM, cars try perspective you’re and lower those used and you to to SG&A cost be we you can standpoint it, where as discussion in that to don’t And from in think to large productivity no we decided our if go or from we’re come going sales our certified the is Because from going a when higher I at we The certainly on a look the of of to what our basis. just the because So, -- traditional you is our on get to then, to just any kind a market global we at in have salespeople. look most grow that trades used with really volume, And be multiple buy. certainly, spaces, that there less perspective. we bricks-and-mortar. we and grow diverse inventory. think benefit we requirements. better

outside driving So, we CarShop put drive us. UK with we a with lower continue again, CPO a be good we have, areas, cases. those better see the And shown we’re see, in we’ve of a we higher online And cars as marketing and will for lockdown, our then, margins, there to are that tools the costs think be the able to able when OEMs brand business. from on in perspective we really and many tools

the foot brand. put looking that units. both of and we’re CarShop at brand target on target beat we by to car, the standpoint XXXX to that we’re truck gas going with going our from or where to want So purchases And perspective, me, the continue on to OEM opportunistic an on growing of from definitely meet XXX,XXX

Freightliner, look a think, multiple business for million City, today. when I be you we’d was $XXX at just acquisition as in particular, retail paying the auto what the just a of XX% Kansas

that’s well disciplined. auto on OEM to the very requirements are So, we side. certainly, compared little think And

going we’ve an that’s the interesting test be true going point by really when So, the this business it’s and new; it’s down pretty market, you all grown analysts tell can using tool. discussion, the John, that used. we flat I to think on acronyms all I And talking time is business probably the where that’s the on because good at about this we to these we SAR, And we’re now, that when our to I growing online the substitutional, got actually incrementally. think the really overall a Right plan. in get things all And down be at think not we’re there. look

have So, the continue we’re have we the as overall, forward I to we’ll think, go going our for dividend of to year. growth, which rest

hopefully, gives you some So, that insight.

John Murphy

it then, And -- helpful. happening mentioned does sound That’s in just second what’s because UK, on question a like think, you’ve the this. I

used I’m UK about things the there. quarter back have bouncing and or talk opening and as is opened up happenings So, you recent really the side, the some curious new on maybe are just on things up as spurting performance if unit there. volume more the could post

Roger Penske

we was about Well, a and they let’s it’s we XX. product -- did, over X down focused QX, we talk that finance there, were sell market the And what PCP.

We’re here taking really out focused people lease on those a on early would like basis. we

had many our our were we X for action who able think along So, hours XX of day, a growth. I of that was development car tool. to our them car new open very deposits upsell And kept in mix also, important and our customer that the And see. items. digital And centers week, business with is we brand then a one put we used days that

are, at think thing we the right at best the where we look now look standpoint to from when at look April of I the business. we where you as is are So, probably

We’re up XXX%.

the April, we the time You by XX we’re we XX,XXX. XX, finish vehicles. X,XXX first days at take did of at And

up So this is And XXXX. we were above or we’re where slightly in equal April XXX%. of

seen got So, there that on acceleration. the we’ve with some is question we’ve open really the XX, no showrooms

go the into we’ll used, month number on at we rest negative the CarShop drive QX a number, a we X,XXX will of in be the run a rate we positive perspective, year. of from we’re as through had to get fact, that forecasting In May, if which

job. guys the So, a great have done

execution all also. of is I some cost personnel, those in And I with -- think We’ve in good. there SG&As out markets. think, out taken leaders all of brands the come premium luxury our the the were

So, over we think next some the here that two we’ll see quarters. growth strong

John Murphy

That’s helpful. And then, just lastly on inventory.

pretty being the in strong. tight. sales mentioned generally seems it it were pretty U.S., like You But the

you supply particularly on operate and think the between Just does normally? do mean, think tightening just it manage I think can you see you through mentioned. curious we relatively the you And lower can new that the puts second you do go had think, quarter? can you Do what generally, I as at obviously, if But, comment, automakers. I is takes used, what on levels, in XX-day XX-day supply you some at, tighten business you than the that, I and they there is mean, still think relatively case up? what I

Roger Penske

those and year, operated end I XXst. be together. the at I of business months. this compared inventory certainly, it morning units, Toyota and looked the now Honda And and at yet Well, the we’ve the for of X,XXX inventory we’re December And down the units roughly X,XXX to four -- would looked

inventory there’s domestic. our our thing We have the X% pressure basically, only on we One is think is key of mix not great So, realize, have models. of shape. to some you

think pressure our key I here brands, BMW we forward don’t say the Audi, quarter. as have great decent So, were shape. go Many quite that -- I flat. wouldn’t Mercedes in of there. the and And these were shape Porsche and with in we the

things if we more then in impact could QX, QX. get Now, through tighter have

I we generating line. standpoint So, the overall think solid in business from help diversification the certainly still that us bottom of will a have our

Operator

question of next comes from Our Stephens. Nelson Rick

Rick Nelson

and quarter. a on afternoon, great Good Congrats Roger Tony.

wanted do math. very I some simple to Roger, So,

annualize that, UK contemplate pretax wouldn’t opening that like XXXX You’ve quarter pre contribution it just income you’re The just $XXX that? Freightliner, gauge CarShop, at If of up done seasonal on also to this your and tax target looks million. a I about that pickup. thoughts like

Roger Penske

in be good we it same said easy. that I numbers out. and time was they take wish just came thing looked I shape, Tony at We to the we’ll when when the for, Well, a but

go we availability, maybe will to Obviously, of given and through the kind year chart grosses us as a don’t get there. impact we’ve that we think, know now. out I you

that I $XXX that realistic. together. promise think under growth. this and acquisition an over And would be return target X% I Look, Hopefully, is case in quarter quarter. think year into their go we is and your was the that put been a unbelievable million Penske that we want and on understand think CarShop, our very second, then our We a Truck maybe talked be But, year And Leasing. We it’s based bump we’ll this and and hope the deliver. maybe of utilization organic first sure realistic is has in there sooner. get here. I’m I we we target. second I get our realistic I strong. get not math about this forecast there a so a as to tailwinds QX. easily, But, the some But, could

Rick Nelson

and more when as get the might about there service I’d thoughts turn? the things Also, outlook during pandemic. here challenged parts your been to has like to

Roger Penske

over Well, were there I parts months. guess, or miles is last come the XXXX, XX% down no question -- in we just service have down, the and it’s five as just in revenue. say U.S. we entered into that saw to six And really, QX in January, driven we

UK, XX%. in overall, XX% the down and We’re down

around. swung really that’s Now,

So, -- are people things are getting out.

We’re XX% XX% that’s UK. doing increase increase car look, We and is a what parts same-store haven’t generated And and time. from need service bring driven on our checks of customers thing. have a you in revenue certain the fact a calling the your in for big BDCs, on U.S., in March done, based an we to it in job saying, to our one the

XX%. So, overall,

to want were X% on in But kind growth that and I of we flat growth. we’re be say up going we’re running QX, you at rate. know, to So, don’t as a that

I is go COVID. move number we’re sitting I know the to with I day, at we’ll which at the the that is look close the really that year of going because what see of just think as down that end here. number, we against think But, not comparable So, realistic on. the QX don’t last

say other So, April. in look probably going X%. weak. down momentum look are shops PPG a and XX% and This to will definitely can us we're X% year people, body to how in sequentially we're of is down up that about shop. give I from more the The probably, to in overall, and think the talked We've the slightly -- But, and we’ve to more showing we’re interest still U.S., got the some better I there picture. about March U.K.

real drive people and So out we there that's driven have matter and will getting strictly opportunity still some a miles that. just of

Operator

from question Benjamin next Our comes Truist. Stephanie of

Stephanie Benjamin

love much touch impressive, as what how bit on the to to wanted a this Just trying to initiatives? the seen come Obviously, come improvements and very internal quarter. structural has business? to get bit? I the bit some a could just of in for just we've as been based costs start the SG&A growth by potentially a growth driven of hear on would the, well a And down is if changes of sense also back, what to is about

Roger Penske

gross XX our excellent. obviously, in was reduction basis Well, to points SG&A

XXX basis about points. think I

So maybe call it XXX within personnel.

As you know, out workforce. of about we've our XX% overall taken

If I at that reduce. component the and able look same you is back to time, we've think been go advertising another

digital, more The back. going we're has mix, cut the been think TV, traditional newspaper radio, obviously, more I pointed.

Some with service which maintenance. services. which people, given less less could just of a when outside of benefit. And less associated some costs come the we've cars, look that at loaner then down, has vehicle T&E, travel, less had With in you certainly less overall, back us -- that,

which have we which you have is about costs. So We've are health got as cost got those think workmen's think we've been something have lower that. good. things look less lower And really I people, all don't because you care been that comp at

be will drive had quarter to helped big -- higher stick. gross obviously big compensation some increase it gross a the on during we from think due had number. I we gross But do. standpoint, but overall, was new, Obviously, it some that will has the profit test really us the the to -- Now and stock

at to basis back a we're going a you look it when be to on on get if XX% rate, think I in normal. run the we yearly XX%, to

Stephanie Benjamin

more your of switching mentioned, particularly, then of I also the helpful. the both about U.S., sourcing bit business the doing the of sourcing look U.S. you're love in some doing bit and really and U.K. gears and outlook believe you That's talk what side CarShop your you to can hear in And what to franchise forward? hot I'd your a the use Great. U.K., given from but about kind how doing some dealers environment in as the if the you a and you're just initiatives.

Roger Penske

Well, Car, certainly, when have U.K. loaner have the or X% balance, its look And XX% XX%, and the other it's seen on we lease here just between been somewhere which numbers and cars returns. -- are at I would to Buy XX% X%. think -- In U.S. of you from if in sourcing depending we our U.S., probably some kind then our shown that U.K., trades. the unique. be over auctions. I've XX% be Your Probably a would little bit

I not of you I not, lot OEM the this or non-OEM think franchise. but -- I existing a a does have the make don't know allow in mentioned your to call if U.K., it on on

helped So very strong what not relationship cars right buy probably Everyone there are in online go could of off as the lease. also online doing The been in Buy the be is sources, -- That's to space buyer OEMs that coming it going our our with but we're Car, CarShop they're Company lot an have is, we're which a at cars. cars alone We because haven't Car, Buy doing will that that I tool else us take the and inventory. call you tools. we've not have -- it's dealerships, And running CarShop. XXX we've Sytnernet, not when done company wholesale Your those of U.K. in marketing, over a tool to extent, to been trade We which inventories, but week the we and from really of a being uses the are Your XXX certain tool using strong. along Plus, to lot a a put with But online it. here, that now. there online only these look you cars big a from finance we and that these probably that tool. they able we're the think think from with our been has

would over we is XX by in the be used We still buyers I -- the of do the internationally, have I which do U.S., managers like out. but we probably have think the here from in U.K. buying that the have or and significant. that to region individual We're buyers benefit area, up. U.K. we OEMs don't it cars vehicles, think the the ramp over in had you buying by and

day, I is drive, service and of that, with this a successful think have single where not I department there captive we've the a could has think treatment couple There success XXXX, and service we customer in a and do VIP deals a And arrives there very opportunity. question. service been for in the competition but then which in out helpful, been the for have we've been doing a just every no is that there. there's customer we at real We're showing years.

Operator

question Our Gupta JPMorgan. from comes of next Rajat

Rajat Gupta

target on a the XXXX just I by billion question So had $X bridge. on the

from growth. about organic talked $XXX the You million

that gross mentioned your early You level margin. rates current of because

So presumably, business be recovering. the million a going lot driven of volumes and that $XXX is just by to service

that not incremental play supplementary to have any the your the channel and very into really how online a of Is assumed there Just a growth number? online curious strategy you And from as see online more Or just offering then do I the profile. contribution to channels? does incremental follow-up.

Roger Penske

as be The drive on service three-year I will the We will head. obviously think the a on that think will you this there drive period, the right which more certainly help during use. look hit we one nail first higher that. SAAR

be see that that also getting during and XX more commissioned we're versus We've time. person XX giving opportunity I going price to productivity units and units the and We be us the go seen XX or adjusted be compensation maybe will XX our to better productivity, XX a think CarShop we'll our in will cost single -- out. grow to in some on certainly one businesses, where with price business. maybe to per traditional selling

we'll I CarShop will tax the use do we're and irrespective investment, of size that with overall, and growth. out more the that's share, PTS with of see -- the taking, focus, out going coming think I certainly and the on So continue what's get organic of organic business. XX% growth benefits from help sharing because fleet PTS that we doing will our the some that's with of more think, I get sourcing the also think market their we use the of Again, key. And our to business, that they're and our

Rajat Gupta

sorry, -- just And hello.

Sorry.

Roger Penske

Go ahead.

Rajat Gupta

on mute. digital resumed And this just Or that more from on aspect growth contribution was that that meaningful point? in of supplementary is that? is I the incremental this,

Roger Penske

side, in important path XX% extent, of that game. you have we're finance use buy is for XX provide that ago, substitutional are look think it, example, and it's our it Toyota online, you Well, think I -- customer that compete available to going our Toyota of think for -- think and the opportunity perfect we into come copy pressure a we getting tools leasing, when outside. they of but their buy and today, that Toyota to not at question certain order ones as monogram. we buy because Vroom They acronyms Carvan with probably today they're websites, And on X Lexus to to coming the different years OEM. I using said, seeing, they OEMs about the and on think a do all that we tools call using just think want and out to we a from said tools to from of And to that no of OEMs financing, -- I some as carbon financial. call the I they XX% we about customer. our the can path now I delivery think than maybe it when with the are be careful and because "Hey, home, to CarMax, There see to And people earlier, the almost are And through we it, some maybe also I with smart as were or Toyota all them think and sources I more a us side, their we're get it's where dealership. the us need and have as And about to come the these our digital the trying different brand." what the it's all and these at a we as

to want build will and to to do here have that requests. we're flexible we a when Toyota it these infrastructure will seamless be it, So and It going a brand. And about an try with Lexus. not to you is built think exclusively online be solution certainly be what OEMs to all in-store adapt for

TFS, they've group, be added So by Lexus again, all and to that to that own money, captive. tremendous I is an by secure this they're a all plus able own, from it ecosystem, will going on be they're think data. technology amount their going supported deal of capability. learning to be And that our also dealer from Toyota their And the honed based what

still opportunities what go he key. directions we're just for different -- digital, want go I we of to to know can be that coming OEMs, drive we're being the driven and that I think in at the into And use, to think faster. customer support So how enough with and being want is having we take to go, technology And is I continue by sure to we on but to another that matter think sure would newer consideration. savvy for No technical this, like and the the say, what's here there's but which we the opportunity be are. probably we that I if going playbook it's tools cost. racetrack, or got less much this these I us

the don't going the I road, all together they Now to tie yet, have they're get customer capability down but used we think journey. aspects of the car as

Rajat Gupta

a Got follow-up color. just it. I really Got That's on it. PTL. had helpful

earnings once we run acquisition contribution to rate the the at the near mean, pricing, like But term. some the how PTL the deurbanization, closed of would earnings normalized if new more factor at earnings in at going I annualized sales earlier the helping taking I Obviously, the look on that some mean, should back that think run then talked you're the like normal obviously, a about PTL You environment? well, as of trend December really be about rental you of PTL, in rate is of gain today, of also forward. helpful.

Roger Penske

PTS up, was pretax or for and XX%, you was Well, look we quarter, revenue at our the grew when up know, XXX%. our as PTL

it. these are logistics it's again, increase look numbers tremendous by we up Year-over-year, XX%. an you So in our driven were business. at But when

Our commercial X%. you at was lease up our rental business up look was X%, and

leave out. So here or to together. all that Consumers rented out leave me, leaving consumer I'm

I the key is other used pricing. that's to think thing truck been

could we're be down. business. hand, used impact go So some market that the the seeing share think a freightliner saw on prices there other in truck slightly if that both But We gain. I

were announced think revenues million is of just the only market and up. we're to that that the I the Our think be share able more couple And thing hundred shows take than earnings, But lease largest I I a penetration competitor think you our theirs. overall, would here. our

rental we've that because and grow to growing had prices, And fleet rental has 'XX far. 'XX, And it we our been and continues as 'XX. maintenance too cut we see contract used back back into maybe lower we after Our cut fleet actually and truck go these we strong.

the XX we see for sure. months So here next good ride should over

Operator

Our next of from Company. question the comes Michael Benchmark of line Ward

Michael Ward

bit CarShop. Roger, about just talking little a

one some in between any differences versus other? region U.S. that on used and but I U.K. you've the structural are favors of touched them, there expansion the the business think

Roger Penske

say was would when it, made that the acquisition brand the CarShop back I when started -- No, we just Tony?

Anthony Pordon

Four years ago.

Roger Penske

I we in to had we years think changed CarShop. that here four added car and And the and ago, obviously already U.S. CarSense then people

X,XXX sit large running commission here there. supply. can to have X,XXX large continuing to And if and May, our footprints we're these are with -- it's we Today, we through want big a and we're one inventory. can areas global units grow of over today, brand one flat. price are just but it's sales we one tools, the So Obviously, with online that probably is sell in you going X,XXX And plus inventory month sitting and we're today, of the XX-day about see a as in what reconditioning. about

good is front as to back-end that I are the pretty end. which can in at we we in And the thing do And over footprint go some the and marketing, the what there we in growth a and the here say, able have there we've both are look the and they how is the that what combined see over sourcing much finance the think been would sourcing So the and the at improve when here And the margins expand But U.S. again, we're looking have the U.K., I in in the would you and forward. shape, F&I, same we same over period. obviously, we U.K. same growth as doing nuances. a be front-end we're as about the

perspective taken playbook really utilizing their and we've branding that over marketing a here. So really from and

a global look So on a we basis. consistent have

Michael Ward

stores, you all will as go acquisition? XX will to that sites? be XX of greenfield Or expansion some the from So

Roger Penske

look the I locations. Greenfield, done, we've think either get format you -- would ground be would have you'll you like that in can't the an the cases, continue connection that most New a looked make And mean, build down current buy we did might people customer. acquisition or shut repurposed with I take We've buy the base you do maybe or at a existing but we buy location. depot we location, would branding whole but we over is online don't we at expand All was up the in we cars, a get to footprint time the we an Jersey. a But by big to that whole that, in from

Michael Ward

a there is greenfield And investment site? ballpark for a

Roger Penske

the that We've million somewhere to get Yes. $XXX said we're looking XX $XXX to locations, probably to million. around

we're complexity, an going in you, you what So revenue $XX you you're million, times look, goodwill to and and if had something. do X.X% you're if it's of, you or maybe of an for acquisition order I think we leaseback or could are a level buy for what today to if about or billion, the to two get the sale probably sure. $XX to more same if spend OEM three it to more really same talking spend have with repurpose going say, the say, to same depending million $X lot brand, get we that's -- return, to then it's -- But that

Operator

next question of Morningstar. Our Instructions] David [Operator from Whiston comes

David Whiston

I did. considering looks the are the wanted kind release press automotive any the But to expertise segment, start retail there stores when numbers help on particular, that that get the the the the CarShop were U.K. group just any In from in business. in it digital U.K. like retail outstanding didn't closed. of

room digital to for capability CarShop? So maybe the is there improve

Roger Penske

in $XX,XXX we a about car because business with the £XX,XXX showrooms you sale on ahead, about talking business and off weekends, shot as I we're closed, that because said days it's we I U.K. of we And when Well, are that's customer sale just the that -- saw or different the think XXth at big our X,XXX and the think over open really going -- here operate in April, to stopped on -- cost we're fall And units. of U.K.

and probably performance. see from bigger a it a days. to and know not to especially the as our car these travel just home customer car, and there it's car So XX XX% new that up the used restrictions but last poor even car. what having level, factor customer A of wanting new that -- in was think at people their out for XX now, perspective, price U.K. right we're sophisticated want -- close a that I because wants were is that they wanted that over or strictly the probably to the showrooms was And see

David Whiston

And over I a to guess, Okay. two-part shifting trucks, question.

GPU weakness was when strong new was ASP so and ago. despite use up that use XX%. new up why use new all, isn't, yet then know really X%, year of a quarter First also, the a I bad volume, in we But

shift there get to new was that So growth? sales your truck GPU mix a nice on

Roger Penske

our truck Well, it was on look, units. new just number think, I one, timing

As where said, in of our down Mexico, Cascadia the the were get shut product. plants majority I we

those And the at lot of QX. into impact. is a the forward end of day, to and move the that had going trucks going I think backlog were we're And pushed so XXX,XXX. up see some that QX And to

based anything it So out availability like those month, of they starting of looks built. trucks components. were a availability what yesterday, checked not the we've will pushing And problems on be COVID lot beginning or of basically, either the

So it's because trucks shortage availability timing. because truck used supply mean, demand. I the new prices, just And on a side something the just drives strictly of and truck that's used

these a key. the vans and with it's is from And think of going and with utilizing the or all and a this perspective moving then I all COVID freight that on, a certainly social and today prices we movement lot obviously across have. equipment, people up country the which distribution driving things

it's price And trading truck a now. new those some driving on of right and and buy that very used frenzy -- on per people guys get because types it's stuff for a want these they strong a You unit profits basis. lot almost That's pieces, use. GrubHub just can them of are using these

David Whiston

mean up that that And for didn't into They Does all? online. at talked total a digital. was those come unit Okay. customers those XXX, completed -- making -- you -- X%, that it about of X% XXX% for store sales were

Roger Penske

think numbers say, in was X,XXX. U.K. we online apply can And in I by for at here. we you the don't XX online would had, have here. card. paid QX. then had £XX. And the approval. because were started was the CarShop, obviously, the and new in day, X,XXX, all side they vehicle fully But on don't the I when online instant they I -- at credit franchise vehicles XXX were for U.K., the sold had that the really transactions, that's the a had numbers. reserve we fact, a sold I finance, they end got vehicles. I of had look take car -- X,XXX wouldn't online, exact X,XXX -- We

XXX process the they of So support here. to and that we And then the had digitally data we locations documentation, for choice which have over delivery. have

provides point. like YouTube with operate. trying ability They we think have that have They to this can they off this online. source. I is I directly do. online good, to what the the that to to customer. how use online. the go get for would it Make at trying this the the exactly to And that's think ability personal. and that's yet We some somewhat and can do than They -- do obviously why quite staying customer tool some videos to the tell gives to been we're that And rather convenience we're This convenient, want

isn't I important, the or certainly we think which process. buying a by me. it's we environment, want all the And directed, shortened flexibility and and low-pressure you is and self by it's the transparency,

David Whiston

last in your half you of In year? this just the chip better the And opinion, gets Okay. second shortage question. do think

Roger Penske

to you tell I that. truck fine. side, truck side, can't know you -- on tell heavy they I I'll we're be the the say going Well,

the for shape it's than big more can thing only say better I the what might think seeing, That's is the hearing players premium/luxury -- I X. be in that sure. I'm

capacity think capacity have I -- of is out and the issues demand. of their because there they some to some of fires the meet the

Operator

any to over to I'd time, floor Mr. turn remarks. closing this back or at And additional for like the Penske

Roger Penske

during today our execution you. I Thank joining just quarter. thank want us for everybody people great and the for thank to

Operator

you, conference call. Thank this conclude gentlemen, and ladies does today's

may disconnect. now You

Penske Automotive (PAG) 28 Apr 212021 Q1 Earnings call transcript