Asbury Automotive Group Reports All-Time Record EPS of $10.38, for First Quarter 2022, up 117% Over Prior Year, and Announces Update to Strategic Growth Plan

DULUTH, Ga.–(BUSINESS WIRE)–Asbury Automotive Group, Inc. (NYSE: ABG) (the “Company”), one of the largest automotive retail and service companies in the U.S., reported record first quarter 2022 net income of $237.7 million ($10.38 per diluted share), an increase of 156% from $92.8 million ($4.78 per diluted share) in the prior year quarter.

“In the first quarter, our legacy Asbury and recently acquired stores contributed to the Company generating all-time record adjusted EBITDA, which increased 139% to $336 million. We are excited about our expanded dealership portfolio and our team members, all of whom have done an outstanding job. The strategic fit of the acquisitions we made in 2021 is clear and we believe that we are now on pace to generate $16 billion in revenue in 2022, a 63% increase over 2021. We have updated our strategic growth plan to reflect our new target of $32 billion in revenue in 2025. Our first quarter results reaffirm our belief that we can achieve our updated 2025 plan,” said David Hult, Asbury’s President and Chief Executive Officer.

“We see tremendous opportunity ahead of us as we roll out Clicklane to our acquired dealerships and integrate Total Care Auto, Powered by Landcar, or TCA, into the legacy Asbury stores. We expect these actions, along with a more optimized dealership portfolio, will allow Asbury to expand its market share, increase productivity and improve the purchasing, servicing and ownership experience of our guests.”

The financial measures discussed below include both GAAP and adjusted (non-GAAP) financial measures. Please see reconciliations for non-GAAP metrics included in the accompanying financial tables.

First quarter 2022 adjusted net income, a non-GAAP measure, increased 134% year-over-year to $212.2 million ($9.27 per diluted share) compared to adjusted net income of $90.7 million ($4.68 per diluted share) in first quarter 2021. Adjusted net income for first quarter 2022 excludes gains, net of tax, of $25.5 million ($1.11 per diluted share) related to a $33.1 million ($1.08 per diluted share) gain on the sale of four dealerships and a $0.9 million ($0.03 per diluted share) sale-leaseback real estate gain.

Net income for the first quarter 2021 was adjusted for the following pre-tax items: gain on legal settlements of $3.5 million ($0.14 per diluted share), gain on sale of real estate of $1.1 million ($0.03 per diluted share), and other real estate related charges of $1.8 million ($0.07 per diluted share).

First Quarter 2022 Operational Summary

Total company vs. 1st Quarter 2021:

  • Revenue of $3.9 billion, an increase of 78%
  • Gross profit increased 107%
  • Gross margin increased 270 bps to 20.2%
  • New vehicle unit volume increased 44%; new vehicle revenue increased 61%; gross profit increased 197%
  • Used vehicle retail unit volume increased 63%; used vehicle retail revenue increased 100%; gross profit increased 102%
  • Finance and insurance revenue increased 130%; gross profit increased 118%
  • Parts and service revenue increased 92%; gross profit increased 70%
  • SG&A as a percentage of gross profit fell to 57.5%, a decrease of 520 bps
  • Operating income increased 135%; adjusted
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Automotive Technologies Market to Record USD 134.06 Bn | Continental AG, DENSO Corp., and HELLA GmbH and Co. KGaA emerge as dominant players

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According to the recent market study by Technavio, the Automotive Technologies Market Size is expected to increase by USD 134.06 billion from 2020 to 2025. However, the growth momentum in the market is expected to decelerate at a CAGR of 11.04%. The report provides a detailed analysis of drivers & opportunities, top winning strategies, competitive scenario, future market trends, market size & estimations, and major investment pockets.

APAC will register the highest growth rate, occupying 53% of the global market share. China, Japan, and South Korea (Republic of Korea) are the key markets for automotive technologies in APAC. However, the market growth in this region will be faster than the growth of the market in other regions.

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Vendor Insights-

The automotive technologies market is fragmented with the presence of several regional and international players. Major players are increasing their footprint in the market by expanding their operations. This has increased competition in the market, which is driving small vendors in the market to focus on introducing technologically advanced products and forming strategic alliances with other players.

Continental AG: The company offers various sensors like cameras, lidar, radar, and control units that provide the necessary information for highly automated driving.

DENSO Corp.: The company offers various electronic platforms, port terrain systems, and others.

HELLA GmbH and Co. KGaA: The company offers a range of vehicle electronics solutions such as LED headlamps, intelligent battery sensors for efficient energy management, lane change assistant, and others.

Intel Corp.: The company offers various technologies for the automotive industry such as autonomous driving, in-vehicle experience, functional safety and electric motor controls, power conversion, and battery management systems for electric vehicles.

NVIDIA Corp.: The company offers various automotive technologies such as ADAS, automated driving, in-vehicle experience, ADAS, and others.

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Regional Market Outlook

The automotive technologies market growth in APAC will be significant during the forecast period. The increasing sales of automobiles and the rising demand for electronics-based driving comfort and safety systems will be crucial in driving the growth of the automotive technologies market in APAC. The report also offers detailed insights into the growth of the market across other regions such as Europe, MEA, North America, and South America. Countries such as the US and Germany are identified as prominent markets for automotive technologies.

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Despite chip crisis, Rolls-Royce sails toward record year

How have your used car prices changed?

They are up by 20 percent to 50 percent depending on the model and market. Prices are reaching their peak point. Customers who don’t want to wait, as they seek instant gratification, are turning to our Provenance Rolls-Royce [the company’s certified used car program]. This is a great business condition for a luxury brand president.

Is it true that Rolls-Royce has the youngest average age of owners within the BMW Group, and this is mainly due to Asia?

No, that’s true globally. Overall, the average age of a Rolls-Royce owner is about 43 years old. Mini is the closest in the BMW Group at about 47. This is really incredible. The reason for that is ultra-high net worth individuals are getting younger and younger each year. We foresaw this trend 10 years ago after talking with private banks about those individuals. That forecast proved right.

What was the average age of owners when you took over as Rolls-Royce CEO in April 2010?

It was 56. Since then, it had decreased every year. To put this into perspective, to have an average of 43 means that for every 60-year-old buyer we get we need somebody who is 20. We have met many of them. They are often young people with great business ideas who have made a lot of money and buy a Rolls-Royce.

With so many younger buyers, will you add a less expensive model to lower the entry point into the brand?

As long as I’m in this position, that will not happen. There is no reason to go into lower segments. We start now at 250,000 euros [excluding sales tax]. That is perfect for us. Also, our customers would hate us if we went downmarket. That’s the last thing they want to see. That’s why you don’t hear me talking about sales numbers or making projections on where we might be in a couple of years. I never do that. Have you ever heard how many Birkin bags that Hermes sells? Probably not. That’s exactly how you need to operate in the luxury segment. We are in a rare biosphere. Nobody needs us to go from A to B. Nobody!

How much do your customers typically spend to personalize their cars?

On average it’s about 70,000 to 80,000 euros. When it comes to the bespoke commissioning of ideas, we see cars easily doubling their initial price. That is quite substantial because it’s not driven marketing. The customer’s imagination is our limit not the other way around. So, the aim is to fulfill every customer’s dream as long as it is safe and technically viable. We are selling several Phantoms at prices that exceed 1 million euros.

Potentially taking those prices one step further is the re-establishment of your so-called Coachbuild department for special projects such as the Boat Tail. Could you share its starting price?

We haven’t revealed the price, but there has been some speculation that it could be the

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