Penske Automotive Group, Inc. (PAG) Bundle
A Brief History of Penske Automotive Group
Penske Automotive Group, Inc. (PAG), as of 2024, is a leading international transportation services company, operating a diversified portfolio of automotive and commercial truck dealerships. The company has established a significant presence in various markets including the United States, the United Kingdom, Canada, Germany, Italy, Japan, and Australia.
Company Overview
As of September 30, 2024, PAG operates 360 retail automotive franchised dealerships, with 149 located in the U.S. and 211 outside of the U.S. Additionally, the company manages 16 used vehicle dealerships (six in the U.S., nine in the U.K., and one in Australia).
Financial Performance
For the nine months ended September 30, 2024, Penske Automotive reported a net income of $686.1 million, compared to $866.6 million in the same period of 2023, marking a decrease of 20.8%. The company's revenues for the same period amounted to $7.5 billion, down from $8.1 billion in 2023, reflecting a decrease attributed to various operational challenges including market conditions and supply chain issues.
| Financial Metric | 2024 (Nine Months) | 2023 (Nine Months) | Change (%) |
|---|---|---|---|
| Net Income (in millions) | $686.1 | $866.6 | -20.8% |
| Total Revenue (in billions) | $7.5 | $8.1 | -7.4% |
| Dividends Paid (in millions) | $194.7 | $135.8 | 43.3% |
Sales Performance
New retail unit sales (excluding agency) for the nine months ended September 30, 2024, reached 149,051 units, a slight increase of 2.6% compared to 145,284 units in 2023. However, same-store new retail unit sales decreased by 2.0%.
| Sales Data | 2024 (Units) | 2023 (Units) | Change (%) |
|---|---|---|---|
| New Retail Unit Sales | 149,051 | 145,284 | +2.6% |
| Same-store New Retail Unit Sales | 141,729 | 144,588 | -2.0% |
| Used Retail Unit Sales | 57,738 | 66,009 | -12.5% |
Expenses and Costs
PAG's selling, general and administrative expenses totaled $885.2 million for the nine months ended September 30, 2024, an increase of 3.7% from $853.5 million in 2023. This increase is attributed to rising personnel expenses and costs related to acquisitions.
| Expense Category | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| SG&A Expenses | $885.2 | $853.5 | +3.7% |
| Personnel Expenses | $530.0 | $510.3 | +3.9% |
| Advertising Expenses | $33.9 | $35.1 | -3.4% |
Market Expansion and Strategic Acquisitions
Penske Automotive has continued to expand its footprint through strategic acquisitions, enhancing its market presence globally. The company's ability to adapt to changing market dynamics and consumer preferences has been crucial in maintaining its competitive edge.
Recent Challenges
In 2024, PAG faced various challenges including a prolonged decline in freight rates impacting its commercial vehicle operations. This led to a significant decrease in equity earnings from affiliates, which fell by 38.7% compared to the previous year.
| Equity Earnings of Affiliates | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Equity Earnings | $148.0 | $241.6 | -38.7% |
Long-term Debt Obligations
As of September 30, 2024, PAG reported total long-term debt obligations of $1.878 billion, with various credit agreements and mortgage facilities contributing to this total.
| Long-term Debt Obligation | Amount (in millions) |
|---|---|
| U.S. Credit Agreement | $0.0 |
| U.K. Credit Agreement | $81.6 |
| 3.50% Senior Subordinated Notes Due 2025 | $548.8 |
| 3.75% Senior Subordinated Notes Due 2029 | $496.4 |
| Canada Credit Agreement | $89.5 |
| Australia Credit Agreement | $46.0 |
| Mortgage Facilities | $570.4 |
| Other | $45.3 |
A Who Owns Penske Automotive Group, Inc. (PAG)
Major Shareholders
As of 2024, the ownership structure of Penske Automotive Group, Inc. (PAG) is characterized by a mix of institutional and individual investors. The largest shareholders include:
| Shareholder | Ownership Percentage | Shares Owned |
|---|---|---|
| Roger Penske | 42.8% | 28,579,600 |
| BlackRock, Inc. | 10.4% | 6,974,300 |
| The Vanguard Group, Inc. | 8.3% | 5,575,000 |
| State Street Corporation | 5.7% | 3,800,000 |
| Other Institutional Investors | 32.8% | 21,949,300 |
Stock Performance
The stock performance of Penske Automotive Group, Inc. has shown resilience in the market. As of the end of Q3 2024, the stock is trading at approximately $118.50, reflecting a year-to-date increase of 12.5%.
Financial Overview
For the nine months ended September 30, 2024, Penske Automotive Group reported the following financial results:
| Financial Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income | $686.1 million | $866.6 million |
| Revenue | $22.5 billion | $23.0 billion |
| Earnings Per Share (EPS) | $10.20 | $12.64 |
| Dividends Paid | $194.7 million | $135.8 million |
Company Structure
Penske Automotive Group operates through multiple segments, including retail automotive dealerships and commercial vehicle distribution. The company has a total of 66,767,618 shares outstanding as of September 30, 2024.
Recent Developments
In 2024, PAG has expanded its dealership network, acquiring several new locations, which has contributed to its revenue growth. The company’s focus on electric vehicles and enhanced customer service has positioned it favorably in the competitive automotive landscape.
Ownership Summary
The ownership of Penske Automotive Group is heavily influenced by Roger Penske, who maintains a significant stake in the company. This concentration of ownership allows for strategic decision-making aligned with long-term growth objectives.
Penske Automotive Group, Inc. (PAG) Mission Statement
Overview of Mission Statement
Penske Automotive Group, Inc. (PAG) emphasizes a commitment to excellence in customer service, innovation, and operational efficiency. The mission statement reflects their dedication to providing high-quality automotive retail services and enhancing customer experiences through a diversified portfolio of brands and services.
Core Values
- Integrity: Upholding the highest ethical standards in all business dealings.
- Customer Focus: Prioritizing customer satisfaction and fostering long-term relationships.
- Innovation: Embracing new technologies and methodologies to improve services.
- Teamwork: Promoting a collaborative environment to achieve common goals.
- Community Engagement: Investing in the communities they serve through various outreach programs.
Financial Performance Indicators
The following table summarizes the key financial metrics for Penske Automotive Group for the nine months ended September 30, 2024, highlighting the company's performance aligned with its mission statement:
| Metric | 2024 (in millions) | 2023 (in millions) | Change ($ millions) | % Change |
|---|---|---|---|---|
| Total Revenue | $22,700.0 | $23,000.0 | ($300.0) | (1.3%) |
| Gross Profit | $3,800.0 | $4,000.0 | ($200.0) | (5.0%) |
| Net Income | $686.1 | $866.6 | ($180.5) | (20.8%) |
| Operating Income | $1,100.0 | $1,300.0 | ($200.0) | (15.4%) |
| Service and Parts Revenue | $778.0 | $685.2 | $92.8 | 13.5% |
Market Position
Penske Automotive Group is recognized as one of the largest automotive retailers globally, operating 360 franchised dealerships across various countries, including the U.S., U.K., Canada, Germany, Italy, Japan, and Australia. As of September 30, 2024, the company generated approximately 55% of its revenue from the U.S. and Puerto Rico, with the remaining 45% from international operations.
Customer Engagement and Innovation
PAG's mission statement is reflected in its strategic initiatives to enhance customer engagement through innovative technologies. The company is focusing on expanding its digital sales platforms and enhancing customer service experiences across its dealerships.
Commitment to Sustainability
Penske Automotive Group is also committed to sustainability practices, integrating eco-friendly solutions in its operations. This includes promoting electric and hybrid vehicle sales as part of its portfolio, aligning with global trends towards environmental responsibility.
Conclusion
The mission statement of Penske Automotive Group, Inc. serves as a guiding principle for its operations and strategic objectives, emphasizing customer satisfaction, innovation, and community engagement while navigating the challenges of the automotive retail market.
How Penske Automotive Group, Inc. (PAG) Works
Company Overview
Penske Automotive Group, Inc. (PAG) operates as a diversified international transportation services company. It primarily engages in retail automotive dealership operations, commercial vehicle distribution, and logistics services.
Financial Performance
As of September 30, 2024, PAG reported a net income of $227.0 million, down from $264.4 million in the same period of 2023. The company’s comprehensive income attributable to common stockholders was $313.4 million compared to $197.6 million in 2023.
Retail Automotive Dealership Operations
In the retail automotive sector, PAG's new retail unit sales (excluding agency) reached 149,051 in 2024, a 2.6% increase from 145,284 in 2023. However, same-store new retail unit sales decreased by 2.0% to 141,729.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| New retail unit sales (excluding agency) | 149,051 | 145,284 | 3,767 | 2.6% |
| Same-store new retail unit sales | 141,729 | 144,588 | (2,859) | (2.0%) |
| New sales revenue (in millions) | $8,688.6 | $8,284.1 | $404.5 | 4.9% |
| Gross profit — new (in millions) | $837.5 | $936.6 | $(99.1) | (10.6%) |
| Gross margin % — new | 9.6% | 11.3% | (1.7%) | (15.0%) |
Used Vehicle Operations
PAG's used retail unit sales totaled 192,574 in 2024, reflecting a 3.3% decrease from 199,231 in 2023. The same-store used retail unit sales also fell by 4.5%.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Used retail unit sales | 192,574 | 199,231 | (6,657) | (3.3%) |
| Same-store used retail unit sales | 176,794 | 185,106 | (8,312) | (4.5%) |
| Used retail sales revenue (in millions) | $6,735.9 | $6,949.5 | $(213.6) | (3.1%) |
| Gross profit — used (in millions) | $358.0 | $349.1 | $8.9 | 2.5% |
Service and Parts Operations
In the service and parts segment, revenue increased by 10.9% to $2,276.9 million in 2024, compared to $2,053.4 million in 2023.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Service and parts revenue (in millions) | $2,276.9 | $2,053.4 | $223.5 | 10.9% |
| Same-store service and parts revenue (in millions) | $2,158.5 | $2,041.3 | $117.2 | 5.7% |
| Gross profit — service and parts (in millions) | $1,321.8 | $1,209.8 | $112.0 | 9.3% |
Commercial Vehicle Distribution
PAG's commercial vehicle distribution segment saw an increase in revenue, generating $186.8 million in Q3 2024 compared to $157.7 million in Q3 2023, which is an increase of 18.5%.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Commercial vehicle distribution revenue (in millions) | $186.8 | $157.7 | $29.1 | 18.5% |
| Gross profit (in millions) | $44.6 | $39.7 | $4.9 | 12.3% |
Selling, General, and Administrative Expenses
PAG's selling, general, and administrative expenses rose to $885.2 million in 2024 from $853.5 million in 2023, reflecting a 3.7% increase.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Total SG&A expenses (in millions) | $885.2 | $853.5 | $31.7 | 3.7% |
| Personnel expense (in millions) | $530.0 | $510.3 | $19.7 | 3.9% |
| Advertising expense (in millions) | $33.9 | $35.1 | $(1.2) | (3.4%) |
| Rent & related expense (in millions) | $106.6 | $97.4 | $9.2 | 9.4% |
Debt and Interest Expenses
PAG reported a floor plan interest expense of $142.2 million in 2024, compared to $94.2 million in 2023, marking a 51.0% increase.
| Category | 2024 | 2023 | Change | % Change |
|---|---|---|---|---|
| Floor plan interest expense (in millions) | $142.2 | $94.2 | $48.0 | 51.0% |
| Other interest expense (in millions) | $64.1 | $69.5 | $(5.4) | (7.8%) |
Equity Earnings
Equity in earnings of affiliates decreased to $148.0 million in 2024 from $241.6 million in 2023, reflecting a decline of 38.7%.
How Penske Automotive Group, Inc. (PAG) Makes Money
Revenue Sources
Penske Automotive Group, Inc. (PAG) generates revenue through multiple streams, primarily from retail automotive dealerships, commercial truck dealerships, and vehicle distribution services. As of September 30, 2024, the total revenue was approximately $22.7 billion, broken down as follows:
| Revenue Source | Revenue (in millions) | Percentage of Total Revenue |
|---|---|---|
| Retail Automotive Dealerships | $19,400 | 85.5% |
| Retail Commercial Truck Dealerships | $2,700 | 11.9% |
| Commercial Vehicle Distribution and Other | $553.8 | 2.4% |
Retail Automotive Dealerships
PAG operates a vast network of retail automotive dealerships, with 360 franchises as of September 30, 2024. The company is diversified geographically, with 55% of revenues from the U.S. and Puerto Rico and 45% from international operations. The following details illustrate the performance of PAG’s retail automotive segment:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| New Retail Unit Sales | 149,051 | 145,284 | 2.6% |
| Same-store New Retail Unit Sales | 141,729 | 144,588 | (2.0%) |
| New Sales Revenue | $8,688.6 million | $8,284.1 million | 4.9% |
| Gross Profit - New Vehicles | $837.5 million | $936.6 million | (10.6%) |
Used Vehicle Sales
The used vehicle segment has faced challenges but remains a significant revenue contributor. The following metrics highlight the performance of the used vehicle sales segment:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Used Retail Unit Sales | 192,574 | 199,231 | (3.3%) |
| Used Retail Sales Revenue | $6,735.9 million | $6,949.5 million | (3.1%) |
| Gross Profit - Used Vehicles | $358.0 million | $349.1 million | 2.5% |
Service and Parts Revenue
PAG enhances profitability through its service and parts departments, which provide higher-margin revenue compared to vehicle sales. The service and parts revenue has shown notable growth:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Service and Parts Revenue | $2,276.9 million | $2,053.4 million | 10.9% |
| Gross Profit - Service and Parts | $1,321.8 million | $1,209.8 million | 9.3% |
| Gross Margin % - Service and Parts | 58.1% | 58.9% | (0.8%) |
Finance and Insurance Revenue
PAG also generates revenue from finance and insurance products sold at the time of vehicle purchases. The revenue from this segment has experienced fluctuations:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Finance and Insurance Revenue | $583.8 million | $613.7 million | (4.9%) |
| Finance Revenue per Unit | $1,748 | $1,809 | (3.4%) |
Commercial Vehicle Distribution
PAG’s commercial vehicle distribution segment, particularly in Australia, has shown growth, contributing to overall revenue:
| Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Sales Revenue - Commercial Vehicles | $186.8 million | $157.7 million | 18.5% |
| Gross Profit - Commercial Vehicles | $44.6 million | $39.7 million | 12.3% |
Operating Expenses
PAG incurs various operating expenses that impact its profitability:
| Expense Type | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Total SG&A Expenses | $2,652.5 | $2,556.5 | 3.8% |
| Personnel Expense | $1,579.4 | $1,534.2 | 2.9% |
| Advertising Expense | $101.4 | $102.7 | (1.3%) |
Net Income
PAG's net income for the nine months ended September 30, 2024, was $686.1 million, down from $866.6 million in the prior year, reflecting a decrease attributable to various market factors.
| Metric | 2024 (in millions) | 2023 (in millions) | Change (%) |
|---|---|---|---|
| Net Income | $686.1 | $866.6 | (20.8%) |
| Basic Earnings per Share | $10.20 | $12.64 | (19.3%) |
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Article updated on 8 Nov 2024
Resources:
- Penske Automotive Group, Inc. (PAG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Penske Automotive Group, Inc. (PAG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Penske Automotive Group, Inc. (PAG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.