Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Q3 2016 Earnings Presentation
19 slides from Hertz Global's earnings presentation, Nov 8, 2016
Slide 1: 3Q 2016 Earnings Call
1 3Q 2016 Earnings Call November 8, 2016 8:00am ET
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Certain statements made within this presentation contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertaint
Slide 3: Non-GAAP Measures
3 Non-GAAP Measures THE FOLLOWING NON-GAAP* MEASURES WILL BE USED IN THE PRESENTATION: Adjusted corporate EBITDA Adjusted corporate EBITDA margin Adjusted pre-tax income (loss) Adjusted net income (loss) Adjusted earnings (loss) per share (Adjusted EPS) Revenue per available car day (RACD) Total RPD
Slide 4: Agenda
4 Agenda BUSINESS OVERVIEW John Tague President & Chief Executive Officer Hertz Global Holdings, Inc. FINANCIAL RESULTS OVERVIEW Tom Kennedy Chief Financial Officer Hertz Global Holdings, Inc. 3Q
Slide 5: 3Q/YTD:16 Consolidated Results
5 3Q/YTD:16 Consolidated Results *Definitions and reconciliations of these non-GAAP measures are provided in the Company’s third quarter 2016 press release. NM – Not Meaningful 3Q GAAP 3Q:16 Results 3Q:15 Results YoY Change 3Q YTD:16 Results 3Q YTD:15 Results YoY Change Revenue $2,542M $2,575M (1)%
Slide 6: 3Q:16 YoY Adjusted Corporate EBITDA Bridge
6 3Q:16 YoY Adjusted Corporate EBITDA Bridge 3Q 1Vehicle contribution includes net depreciation rate, utilization and vehicle interest • Cost savings not sufficient to fully offset revenue and vehicle contribution pressures $430M $329MAll Other items Full Potential Plan Cost Savings U.S. RAC Vehicle
Slide 7: 3Q YTD:16 Adjusted Corporate EBITDA Bridge
7 3Q 3Q YTD:16 Adjusted Corporate EBITDA Bridge Consolidated Cost Savings • FY:16E $350M full year savings – 3Q:16 realized savings of ~$90M – YTD 9/30/16 realized savings of ~$260M • FY:15 realized savings of ~$230M $768M $541M All Other Items Full Potential Plan Cost Savings U.S. RAC Revenue Contr
Slide 8: Adjusted Corporate EBITDA Variance to 8/8/16 Guidance
8 Adjusted Corporate EBITDA Variance to 8/8/16 Guidance Variance to 8/8/16 Guidance Comments Global Revenue Pressure ($70)M U.S. vehicles out of service; Continued post EU terror event pressure Global Fleet Ownership, Incl Utilization ($100)M Declining residuals on compacts/mid size; shortening hold
Slide 9: Quarterly Overview
9 TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc. Quarterly Overview
Slide 10: 3Q:16 U.S. RAC Revenue Performance
10 3Q:16 U.S. RAC Revenue Performance Revenue Days Rate Vehicle Utilization (bps) Capacity RACD -2% -2% -8% -2% 6% 2% 0% 1% -8% -10% -5% -3% 660 540 440 60 -2% -5% -5% 2% 0% -3% 0% -4% U.S. RAC (YOY quarterly results) Revenue is defined as total revenue excluding ancillary retail car sales. Capacity
Slide 11: 3Q:16 U.S. RAC YoY Total RPD Bridge
11 3Q • Q3:16 last quarter of impact from DTG transaction day counting methodology • Expect ancillary fuel pricing pressure to anniversary mid-Q1:17 • Customer mix shifted to lower yielding segments due to corporate volume weakness • Higher mix of longer-length rental volumes YoY, OAP insurance repl
Slide 12: 3Q:16 U.S. RAC Monthly Depreciation Per Unit
12 3Q:16 U.S. RAC Monthly Depreciation Per Unit 3Q 28% 39% 33% 40% 25% 35% Auction Retail Dealer Direct 3Q:16 3Q:15 Use of Alternative Sales Channels core competency, maintaining 72% of mix • 39% of sales through highest-return retail channel 3Q:16 Non-Program Vehicle Disposition Channel Mix Monthly
Slide 13: 3Q:16 International RAC
13 3Q:16 International RAC 3Q • 3Q:16 revenue increased 1% YoY, excluding FX - Volume increased 2% despite greater than expected weakness in inbound long-haul business following recent terrorist attacks in Europe - Total RPD declined 1%, on a constant currency basis, due to impact of reduced pace of
Slide 14: Cash Flow / Balance Sheet Overview
14 CASH FLOW / BALANCE SHEET OVERVIEW TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 15: Liquidity and Debt Overview
15 Liquidity and Debt Overview 9/30/16 Proforma for 6.75% Note Redemption Senior RCF Availability $1,100M $1,100M Unrestricted Cash 1,430M 616M Corporate Liquidity $2,530M $1,716M • Executed ~$1.6 billion 3Q:16 financing transactions – $800 million 5.50% Senior Note Issuance – Proceeds used to refin
Slide 16: Non-Vehicle Debt Maturity Profile
16 1Reflects redemption of $800 million of the 6.75% Senior Notes due 2019 which occurred in October 2016. Excludes $27 million of Promissory Notes due 2028, and $11 million of other non-vehicle debt 2$600 million of letters of credit outstanding under the Senior RCF resulting in approximately $1.1
Slide 17: Outlook
17 OUTLOOK
Slide 18: FY:16 Updated Financial Guidance
18 FY:16 Updated Financial Guidance FY:16 Guidance Adjusted Corporate EBITDA $575M - $625M Non-vehicle capital expenditures, net $75M – $85M Non-Vehicle cash interest expense $280M – $285M Cash income taxes $60M – $65M Free cash flow $250M – $300M U.S. RAC net depreciation per unit per month $295 -
Slide 19: Q&A
19 Q&A
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