FORWARD-LOOKING STATEMENTS

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Wesley Shepherd
5 years ago
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1 Q2, 2017

2 FORWARD-LOOKING STATEMENTS 2 Certain information contained in this presentation looks forward in time and deals with other than historical or current facts for AutoCanada Inc. ( AutoCanada or the Company ). The use of any of the words could, expect, believe, will, projected, estimated and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company s current belief or assumptions as to the outcome and timing of such future events. In particular, forward-looking statements in this presentation include, but are not limited to, references to: the Company s general strategic plans and growth strategies; future sales and revenue; future dealership acquisitions and open point dealerships; the Company s targets relating to return on investment and financial ratios; dividend payout policies; future intentions relating to financial leverage; and the retail automotive industry. Although the Company believes that the expectations reflected by the forward-looking statements presented in this presentation are reasonable, these statements have been based on assumptions and factors concerning future events that may prove to be inaccurate. Actual future results may differ materially. The Company s annual information form for the year ended December 31, 2016 and other documents filed with securities regulatory authorities (accessible through the SEDAR website describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. 2

3 Multiple Touch Points on the Customer Journey 3

4 Why Invest in AutoCanada? 4 Well Performing Sector Key Part of the Economy Market Highly Fragmented; Consolidation Opportunities Auto retail sector performed extremely well in 2016; on track for all-time record in 2017 First time ever that sales broke through 1 million new units in first half of 2017 Advances in technology, styling and safety expected to drive long-term new vehicle sales Annual spending of $143 billion in 2016 up 9.3% compared to 2014 Greater than any other Canadian retail segment Canadian dealer market is fragmented with approximately 3,300 dealerships and 2,000 owners Significant proportion of dealers will be retiring in the next few years creating a succession planning opportunity (1) Industry shifting from mom & pop dealerships to larger dealer groups Dealership owners are facing increasing facility capital requirements for OEM branding programs Public Ownership Evolving OEM acceptance of publicly-listed companies is growing in Canada Canada s only publicly-traded auto retailer (1) Source: PricewaterhouseCooper s Automotive Trendsetter Report 2012

5 Unparalleled Presence & Brands 5 DEALERSHIPS 57 OEMs 10 BRANDS TOTAL REVENUE 22 $2.9B NEW VEHICLE SALES (UNITS) 40,032 USED VEHICLE SALES (UNITS) 19,561 SERVICE BAYS 977 SERVICE ORDERS 863,970 *Revenue, Sales and Service figures represent 2016 annual totals

6 Sales Platform Mix 6 European Import 21.0% Asian Import 18.0% General Motors 19.5% FCA 41.5% FOCUS ON IMPROVING BALANCE

Dealership Clusters 7 AutoCanada aims to cluster our dealerships in major metropolitan centres Clusters allow for the sharing of Management resources along with the sharing of best practices Top

7 Dealership Clusters 7 AutoCanada aims to cluster our dealerships in major metropolitan centres Clusters allow for the sharing of Management resources along with the sharing of best practices Top performing staff are given further opportunities at other dealerships in the Cluster, promoting growth and development Edmonton and area: 9 dealerships Calgary and area: 9 dealerships Grande Prairie: 5 dealerships Winnipeg: 4 dealerships Montreal: 3 dealerships Ottawa: 3 dealerships Prince George: 3 dealerships

Resilient Business Model 8 Auto dealerships are resilient in adverse market conditions 2016 Revenue 2016 Gross Profit Well-established and accepted dealership model has existed for 50+ years in the

8 Resilient Business Model 8 Auto dealerships are resilient in adverse market conditions 2016 Revenue 2016 Gross Profit Well-established and accepted dealership model has existed for 50+ years in the Canadian marketplace OEMs committed to dealership success and profitability 13.2% 4.5% 24.6% 24.3% Four business segments provide diversified and stable revenue 25.1% 57.2% 9.7% Dealerships have a variable cost structure, with the parts & service business covering most of the fixed costs of the entire dealership 41.4% Parts & service business is a counter-cyclical and stable recurring revenue stream

O u r F o c u s Strategic Levers 9 OPERATIONAL EXCELLENCE ACQUISITION & GROWTH STRATEGY COST CONTROL & BALANCE SHEET STRENGTH Enhance Dealership Performance Increase

9 O u r F o c u s Strategic Levers 9 OPERATIONAL EXCELLENCE ACQUISITION & GROWTH STRATEGY COST CONTROL & BALANCE SHEET STRENGTH Enhance Dealership Performance Increase Available Brands Broaden Geographies Offer Full Range of Vehicles Dealer Clusters in Key Markets System-wide Improvements Head office Efficiencies Manage Debt & Capital Expenditures

10 10 OPERATIONAL EXCELLENCE Multi-location model serves a diversified geographic customer and revenue base; cluster strategy enables other scalable benefits Enhance Dealership Performance Decentralized operations with centralized administration and strategy Dealer Support Services empowers the very best of Dealer Principals to make key operating decisions within a financial and governance framework Dealership support based on brand team platforms better positioned to meet the needs of dealers and OEMs Uniform application of best practices: innovative ideas, benchmarking and data analytics

11 11 ACQUISITION & GROWTH STRATEGY Increase Available Brands Broaden Geographies Offer Full Range of Vehicles Dealer Clusters in Key Markets Ongoing assessment of acquisition and Open Point opportunities to diversify geographic reach and brand portfolio Building on OEM relationships to broaden reach of existing brands, add new ones Focus on immediately accretive acquisitions 15% to 20% pretax annual ROI Dedicated teams for pre-acquisition assessment, post-acquisition integration Integration focus includes continuous improvements in efficiencies, and deepening IT and analytical capabilities Look for flagship stores in metropolitan markets; dealership clusters to enhance scale opportunities Capital is allocated where it has the highest rate of return; priorities include new Open Point locations, dealership relocations and upgrades

12 12 COST CONTROL & BALANCE SHEET STRENGTH System-wide Improvements Head office Efficiencies Manage Debt & Capital Expenditures Aggressively manage our fixed and variable costs Centralized purchasing and shared resources strategy reduce costs for dealerships on everything from payroll to tires Business planning process includes expense control and vehicle delivery targets Inventory management based on on market information and consumer buying patterns Dealer Council provides forum to discuss issues and leverages successes from across the network Company pursuing national procurement initiatives

Leadership Team 13 Steven Landry President & CEO Leads all aspects of AutoCanada,

the Automotive industry Former CEO of Chrysler Canada and EVP of Chrysler Group Mark

retail automotive professional Four years as Dealer Principal at St.

Accomplished finance professional Oversees Cost Control & Balance Sheet Strength

growth Erin Oor VP Corporate Development & Admin Spearheads our acquisition and

13 Leadership Team 13 Steven Landry President & CEO Leads all aspects of AutoCanada, providing a vision for future growth and internal development Experienced Leader in the Automotive industry Former CEO of Chrysler Canada and EVP of Chrysler Group Mark Warsaba Chief Operations Officer Promotor of Operational Excellence Experienced retail automotive professional Four years as Dealer Principal at St. James Volkswagen and Audi Winnipeg Chris Burrows Chief Financial Officer Accomplished finance professional Oversees Cost Control & Balance Sheet Strength Managing all financial aspects of AutoCanada while preparing the Company for further growth Erin Oor VP Corporate Development & Admin Spearheads our acquisition and growth strategy Experienced negotiator and legal strategist General Counsel for AutoCanada Former Partner at Bryan & Company LLP

14 A Successful Track Record

Our Record New Brands in Last 4 Years 15 New Locations in Last 4 Years Duncan BC GM Prince Albert SK GM Kelowna BC GM Saskatoon SK FCA, GM Calgary AB FCA (3), Hyundai (2), Mitsubishi, Winnipeg MB

15 Our Record New Brands in Last 4 Years 15 New Locations in Last 4 Years Duncan BC GM Prince Albert SK GM Kelowna BC GM Saskatoon SK FCA, GM Calgary AB FCA (3), Hyundai (2), Mitsubishi, Winnipeg MB Audi, Volkswagen, FCA, GM Volkswagen, Nissan, Infiniti Guelph ON Hyundai, FCA Edmonton AB Kia, Volkswagen, GM (3), FCA Ottawa ON Nissan (2), Infiniti Grande Prairie AB Volkswagen Toronto ON FCA North Battleford SK GM Montreal QC Mercedez-Benz, Smart, BMW (2), MINI (2)

Successful Integration 16 BMW Laval and BMW Canbec were acquired in 2014 NEW VEHICLE SALES 2015 2016 2,210 2,321

7 57.9 Benchmark: 53.7 Benchmark: 69.4 USED VEHICLE SALES 2015 2016 648 757 2015 SSI 2016 87.2 91.7 Benchmark: 82.

16 Successful Integration 16 BMW Laval and BMW Canbec were acquired in 2014 NEW VEHICLE SALES ,210 2, CSI Benchmark: 53.7 Benchmark: 69.4 NEW VEHICLE SALES ,576 1, CSI Benchmark: 53.7 Benchmark: 69.4 USED VEHICLE SALES SSI Benchmark: 82.1 Benchmark: 86.5 USED VEHICLE SALES SSI Benchmark: 82.1 Benchmark:

17 17 Dealership Profitability Long-term Integration and Growth Sherwood Park Chevrolet acquired April 30, 2012 Sherwood Park Buick GMC acquired May 31, Sherwood Park Chevrolet Sherwood Park Buick GMC 17

18 18 18 Audi Winnipeg Dealership Relocation Construction in progress Expected completion Q or early 2018

19 2016 Snap Shot 19 As at December 31, % Change New vehicles (units) 40,032 42, % Used vehicles (units) 19,561 20, % Revenue $2.89B $2.90B -0.4% Adjusted net income $39.9M $40.3M -1.0% Gross profit % 16.8% 16.8% 0% Basic adjusted earnings per share $1.45 $ % Adjusted free cash flow $68.6M $38.8M 76.7%

20 2017 Q2 Highlights 20 As at June 30, % Change New vehicles (units) 13,429 12, % Used vehicles (units) 5,061 5, % Revenue $894.9M $842.3M 6.3% Adjusted net income $15.5M $15.5M 0.2% Gross profit % 16.1% 16.0% 0.6% Basic adjusted earnings per share $0.57* $ % Adjusted free cash flow $36.2M $21.6M 67.7% *Including a one-time payment of $9.8 million net of related expenses and taxes as part of a settlement with an OEM, earnings per share were $0.91

21 First Half 2017 Snapshot $120,000 First Half 2017 vs. First Half 2016 Gross Profit by Department 21 $100,000 $103,590 $100,626 $80,000 $60,000 $64,145 $61,677 $62,680 $59,930 $40,000 $20,000 $25,035 $24,178 $0 New Vehicles Used Vehicles Parts, Service & Collision Repair Finance, Insurance and other

22 Additional Information

23 23 NEW VEHICLE SALES Revenue % Gross Profit % Revenue & Units Sold Gross Profit & Gross Margin YTD % 7.0% $140 16% % 7.2% New vehicle sales drive high-margin related transactions, including resale of trade-ins, sale of third-party financing, service or insurance products and recurring service and repair business AutoCanada sold 40,032 new vehicles in 2016 (1) Sales (C$M) $1,800 $1,600 $1,400 $1,200 $1,000 $800 $600 $400 $200 $ $ $ $1, $1,668 $1, $1, New Vehicles Sold (000's) Gross Profit (C$M) $120 $100 $80 $60 $40 $20 $48 7.5% $76 $58 8.5% 8.6% $ % $122 $118 $ % 7.2% 7.1% 15% 14% 13% 12% 11% 10% 9% 8% 7% Gross Margin (%) $ LTM 0 $ LTM 6% Sales (C$M) New Vehicles Sold (000's) Gross Profit (C$M) Gross Margin (%) Note: (1) 83% of new vehicle sales were made to retail customers, and the balance to lower margin fleet business

24 24 USED VEHICLE SALES Revenue % Gross Profit % REVENUE & UNITS SOLD GROSS PROFIT & GROSS MARGIN YTD % 7.2% % 6.5% Used vehicle sales also drive related highermargin transactions, including service contracts, reconditioning opportunities for parts and service, recurring parts and service business and financing commissions Trade-ins also help support new vehicle sales by reducing the consumers net cash cost of the new vehicle The sale of used vehicles are not tightly controlled by the OEM s, allowing AutoCanada to take trade-ins and resell any vehicle brand Sales (C$M) $800 $700 $600 $500 $400 $300 $200 $100 $0 $ $ $ $ $ $ $ LTM Sales (C$M) Used Vehicles Sold (000's) Used Vehicles Sold (000's) Gross Profit (C$M) $60 $50 $40 $30 $20 $10 $0 $17 8.4% $16 $20 6.7% 6.7% $30 6.0% $41 5.8% $47 6.5% $48 7.0% LTM Gross Profit (C$M) Gross Margin (%) 15% 13% 11% 9% 7% 5% Gross Margin (%)

25 PARTS, SERVICE & COLLISION REPAIR 25 % Revenue Gross Profit % YTD % 50.6% % 52.6% Absorption rate of 87% in 2016 (1) In 2016, AutoCanada completed 863,970 service orders on 928 service bays (year end) Parts & service activity is generally considered counter-cyclical Vehicle service under the manufacturer warranty must be completed at a franchised dealer providing a large captive market Independent repair shops are closing as highly specialized, capital intensive equipment and skilled labour is required to service increasingly complex vehicles Sales (C$M) REVENUE & SERVICE ORDERS $420 $360 $300 $240 $180 $120 $60 $0 $110 $ $ $ $388 $ $ LTM Sales (C$M) Service Orders (000's) Service Orders (000's) Gross Profit (C$M) GROSS PROFIT & GROSS MARGIN $220 $200 $180 $160 $140 $120 $100 $80 $60 $40 $20 $0 52.2% 52.4% $58 $ % $74 $129 $ % 50.0% $ % $ % LTM Gross Profit (C$M) Gross Margin (%) Note: (1) Absorption rate is the extent to which the gross profit of the parts & service segment covers its own operations plus the fixed costs of operating the dealerships (fixed salaries and benefits, administration costs, occupancy costs, insurance expense, utilities expense and non-floorplan interest expense; 25 excludes all costs pertaining to head office) 60% 55% 50% 45% 40% Gross Margin (%)

26 26 FINANCE, INSURANCE & OTHER Revenue % Gross Profit % REVENUE & TOTAL VEHICLES SOLD GROSS PROFIT & GROSS MARGIN YTD % 91.3% % 91.5% Every vehicle sale presents AutoCanada with an opportunity to increase profits through the sale of additional products such as third party financing or lease arrangements, extended warranties, service contracts and insurance products AutoCanada is paid a commission on the transaction and retains no financing risk Sales (C$M) $175 $150 $125 $100 $75 $50 $25 $0 $ $ $ $ $ $130 $ LTM Total Vehicles Sold (000's) Gross Profit (C$M) $125 $100 $75 $50 $25 $0 $131 $119 $122 $109 $76 $56 $ % 91.8% 91.2% 91.5% 91.7% 90.7% 89.9% LTM 98% 94% 90% 86% Gross Margin (%) High margin and excellent growth Sales (C$M) Total Vehicles Sold (000's) Gross Profit (C$M) Gross Margin (%) Represented 91.5% gross margin in 2016

27 For further information contact: Chris Burrows, CFO

Investor Presentation Q3, 2017

Investor Presentation Q3, 2017 FORWARD-LOOKING STATEMENTS 2 Certain information contained in this presentation looks forward in time and deals with other than historical or current facts for AutoCanada