Eurazeo SE · EURONEXT:RF
Eurazeo — Europcar — Investor Day (January 2011)
75 slides from Eurazeo's investor day presentation, Jan 26, 2011
Slide 1: Investor Day Europcar
January 26, 2011 INVESTOR DAY EUROPCAR
Slide 2: Disclaimer
Disclaimer This document has been prepared by Eurazeo SA (“Eurazeo”) and Europcar Groupe SA ("Europcar" and together with Eurazeo, the "Companies") solely for the use of presentations made to investors or analysts. The Companies make no representations or warranties that the information containe
Slide 3: Eurazeo team dedicated to Europcar
Eurazeo team dedicated to Europcar Patrick Sayer Chief Executive Officer Fabrice de Gaudemar Executive Board member Eric Schaefer Associate Director Yann-Hervé du Rusquec Senior Investment Manager
Slide 4: Agenda
Agenda 9.30-10.30am Welcome coffee/breakfast 10.30am Introduction by Patrick Sayer, CEO of Eurazeo 10.45-12.45 Presentation by the top management - Europcar and its markets - Understanding Europcar’s Business Model and Financials - Reinforcing Europcar’s leadership - Q&A 12.45-1.45pm Buffet Lunch 1.
Slide 5: Eurazeo: 2010 was an active year
Eurazeo 2010 was an active year for Eurazeo: new momentum Split of Accor and Edenred: creation of two leaders in their industry Launch of Eurazeo Croissance and acquisition of Fonroche Successful refinancing of the Senior Asset Financing Loan of Europcar and of part of the corporate HY notes
Slide 6: Transformation objectives
Transformation objectives In 2006 2006-2008 2009-2010 2011-2013 Acquisition Growth Downturn Rebound Change in management Accelerate topline growth Acquisitions, both bolt-on Continue the group’s Pricing discipline and (Keddy, Ultramar, Betacar) and development in Europe leadership, with re
Slide 7: Investor Day
Investor Day January 26, 26 2011
Slide 8: Management Team
Management Team Philippe Guillemot Chief Executive Officer Charles Desmartis Rafael Girona Chief Financial Officer Chief Operating Officer Investor Day 26/01/2011 8 8
Slide 9: Agenda
Agenda Europcar and its Markets Europcar’s Business and Financial Model Europcar’s Ambition Q&A Investor Day 26/01/2011 9
Slide 10: Agenda
Agenda Europcar and its Markets Europcar’s Business and Financial Model Europcar’s Ambition Q&A Investor Day 26/01/2011 10
Slide 11: Europcar is at the Crossroad of Main Business Environments
Europcar is at the Crossroad of 3 Main Business Environments Travel and Mobility needs ► Partnering with customers in their daily lives and mobility needs Capital markets Automotive industry ► Diversified and long-term financing ► Sourcing fleet vehicles through long-term OEM partnerships Investor D
Slide 12: Positioning Europcar in Mobility Schemes
Positioning Europcar in Mobility Schemes Public Transportation Car Access Modes 9 Taxi 9 Bus 9 Train 9Car sharing 9Short & Mid term 9Leasing / Long 9 Subway 9Car ownership 9Car Club car/van rental term car rental 9 Airplane 9 Velib’ ► The European Leader in Car Rental Services For Leisure & Business
Slide 13: Europcar ID card
Europcar ID card [ Brand revenue of c.€3.1 billion** across 150 countries through leading brands - Europcar (worldwide) - National and Alamo (EMEA) [ c.€2.0 billion** consolidated revenue [ c.6,600 employees [ 3,464 locations worldwide World's Leading Car Hire - 1,807 stations operated directly in c
Slide 14: Europcar: The European Leader with Global Reach
Europcar: The European Leader with Global Reach Corporate Countries >10 000 stations Europcar presence (through worldwide International franchise network) Partnerships ► Access to #1 Global Network Investor Day 26/01/2011 14
Slide 15: Europcar: The European Leader with Global Reach
Europcar: The European Leader with Global Reach Corporate Countries 1,807 stations ► Europe is the 2nd Largest Market for Car Rental ► Projected to Reach c.€11 billion* in 2013 (vs €9.6 billion in 2010) * Source Euromonitor Based on 1.3593 €/$ FX rate as of January 21, 2011 Investor Day 26/01/2011 1
Slide 16: Market Leader in Europe
Market Leader in Europe Market Share vs. Competition 2009 #1 #1 #2 Others 32.9% Groupe p 26.4% #1 Sixt 10.0% #1 14.2% 16.5% Hertz Avis #1 #1 Europe ► >26 % Market Share in Europe* *Source: Euromonitor Investor Day 26/01/2011 16
Slide 17: Diverse European Markets
Diverse European Markets Illustrative diversity features Model countries [ Portugal [ UK [ Germany Europcar Seasonality* 100 346 100 188 100 144 (from Jan. to Aug. 2010; base 100 = Lowest Point) Lowest Highest Lowest Highest Lowest Highest in Feb. in Aug. in Jan. in Jul. in Jan. in Jul. Europcar spl
Slide 18: A Multi-Domestic Model Geared to Cope With Europe Diversity
A Multi-Domestic Model Geared to Cope With Europe Diversity Didier Fenix Ken McCall Roland Keppler Arnd Rieken Group Franchise Director Stephane Corthier Valerio Gridelli Paulo Moura José-Maria Gonzalez Investor Day 26/01/2011 18
Slide 19: International Coverage through Franchise Network
International Coverage through Franchise Network… Europcar presence (through 1,657 stations International franchise network) ► Franchise Network in 140 Countries Investor Day 26/01/2011 19
Slide 20: Franchise Network
Franchise Network 2010 GDP Growth Rates Qatar 16% #1 #2 Singapore Others Libya 10% India Belarus Argentina 8% Turkey Philippines 6% Mexico Switzerland Armenia 4% Greece Morocco Chile UAE Finland South Africa Sweden Poland Egypt Norway 2% Netherlands Russia Cyprus Hungary Austria Denmark Iceland 0% I
Slide 21: Strategic Commercial Alliances/Partnerships
… and Strategic Commercial Alliances/Partnerships 6,300 stations Partnerships Investor Day 26/01/2011 21
Slide 22: Europcar: The European Leader with Global Reach
Europcar: The European Leader with Global Reach Corporate Countries >10 000 stations Europcar presence (through worldwide International franchise network) Partnerships ► Access to #1 Global Network Investor Day 26/01/2011 22
Slide 23: Ability to Serve Large Corporations Globally
Ability to Serve Large Corporations Globally Investor Day 26/01/2011 23
Slide 24: A Diversified and Balanced Segment Mix
A Diversified and Balanced Segment Mix 2009 Revenue Split [ Geography [ Leisure vs. Business [ Airport vs. Non-Airport Portugal Partnerships 4% Belgium 6% €1,851m €1,744m* Australia Tour operators New Zealand 5% 3% Other*** and travel agents Large €1,396m 12% business 62% 46% 2% 47% Spain Germany ho
Slide 25: Europcar's Revenue Has Historically Amplified Change in GDP
Europcar's Revenue Has Historically Amplified Change in GDP Europcar Western Europe GDP Europcar organic pro revenue evolution forma revenue growth1 growth1 39.3% 14.8% 3.1% 2.8% 2.2% 14.1% 8.7% 0.3% 0.5% (10.8%) (4.1%) (11.5%) 2006A 2007A 2008A 2009A Note: (1) See basis of preparation See in append
Slide 26: Europcar is at the Crossroad of Main Business Environments
Europcar is at the Crossroad of 3 Main Business Environments Travel and Mobility needs ► Partnering with customers in their daily lives and mobility needs Capital markets Automotive industry ► Diversified and long-term financing ► Sourcing fleet vehicles through long-term OEM partnerships Investor D
Slide 27: Increasing Travel
Increasing Travel Evolution of tourism Evolution of airline passenger traffic Evolution of high speed train traffic in Europe* (base 100 in 2001) in Europe* (base 100 in 2001) in Europe* (base 100 in 2001) Inbound Outbound 132 RPKs High speed-rail (passenger km) 165 151 147 126 145 158 124 125 150 1
Slide 28: Consumers' Behavior and Expectations Are Changing
Consumers’ Behavior and Expectations Are Changing Relationship to the car Customers Sustainability Awareness e-Services Investor Day 26/01/2011 28
Slide 29: A Changing Relationship To The Car
A Changing Relationship To The Car [ Car ownership is increasingly challenged by: - Financial constraints - Public urbanization policies [ 90% of European car owners have changed their driving habits or driven less in the past year for cost reasons [ 40% of European car owners (45% in urban areas) c
Slide 30: Fast Adoption of e-Services
Fast Adoption of e-Services [ e-Commerce moving from "lookers" to "bookers“ [ Development of smartphones leading to the development of mobile applications [ « Now Generation » looking for: - Instant and convergent information - Seamless permanent connectivity [ Development of telematics leading to n
Slide 31: Sustainability Awareness
Sustainability Awareness [ Increasing urbanization: 70% urbanization rate expected in 2050 vs. c. 50% in 2010 [ Nearly 50% of Europeans think that climate change is one of the most serious problems facing the world today [ Increasing need for innovative, environmentally-friendly services related to
Slide 32: Europcar is at the Crossroad of Main Business Environments
Europcar is at the Crossroad of 3 Main Business Environments Travel and Mobility needs ► Partnering with customers in their daily lives and mobility needs Capital markets Automotive industry ► Diversified and long-term financing ► Sourcing fleet vehicles through long-term OEM partnerships Investor D
Slide 33: Europe: an Integrated Car Distribution Market
Europe: an Integrated Car Distribution Market Car Distribution Channel Features Europe USA - Build-to-order (OEM**) 999 9 - Developing exclusivity (Dealers) 99 9 - Decrease in number of dealerships over 1999 - 2009 9 9 9* 9* - Sales outlet size (Dealers) 9 999 - Auctioneers 9 999 ► In Europe, OEMs H
Slide 34: Europcar: OEMs Partner of Choice
Europcar: OEMs Partner of Choice Europcar Share In OEM’s Direct Sales to European Car Rental Industry 100% 90% 80% 70% Europcar bought in 2010 c.35%* of OEM Direct Sales to European car rental industry 60% 50% 40% 30% 20% 10% 0% Audi Seat Skoda VW Fiat Citroen Peugeot Renault Daimler Chrysler Opel H
Slide 35: A Policy of Diversified Fleet Acquisition and Offer
A Policy of Diversified Fleet Acquisition and Offer [ 2010 Fleet Deliveries VW OTHERS TOYOTA 2% GROUP 28% [ Constantly renewed fleet: BMW 1% AUDI 5% HYUNDAI GROUP 2% 2% SEAT 4% SKODA 3% - Average age is between 5 to 7 months FORD 5% VW 16 % (depending on the period of the year) DAIMLER 10% - Average
Slide 36: Video
[VIDEO Investor Day 26/01/2011 36
Slide 37: Europcar And Its Markets: Forward Thinking Features
Europcar And Its Markets: Forward Thinking Features [ European Leader giving access to the #1 car global network [ Europcar’s model: the right fit for European car rental market diversity [ Buy-back model matching European car market supply [ Car rental as a sustainable access to cars [ Able to deli
Slide 38: Agenda
Agenda Europcar and its Markets Europcar’s Business and Financial Model Europcar’s Ambition Q&A Investor Day 26/01/2011 38
Slide 39: Understanding Europcar's Business Model
Understanding Europcar’s Business Model Operating Income Statement No. of rental days Rental x Revenue generation revenue Revenue Per Day (RPD) Other revenue (Fuel and Franchising fees) - = Operating income Fleet costs variable Revenue and rental related costs Costs variable Personnel, Network and H
Slide 40: Europcar's Operating Income Statement
Europcar’s Operating Income Statement In millions of € 2009 % of Rev. Revenue 1,851 100% - Rental revenue 1,722 - Franchising fees 49 - Other revenue 80 Fleet costs* (670) 36% Revenue and rental related costs * (485) 26% Personnel, Network and HQ overhead costs * (535) 29% Other income (costs), net
Slide 41: Rental Revenue Recent Evolution
Rental Revenue Recent Evolution Rental revenue YOY -13.1% -9.0% -11.3% +4.1% +5.8% +4.8% variation 5.3% 3.6% 4.5% 3.9% 3.5% 2.4% 0.7% 1.3% 0.9% Rental days YOY Variation (12.8)% (14.1)% Average RPD YOY Variation (15.0)% First nine First nine H1-09 Q3-09 months 2009 H1-10 Q3-10 months 2010 Q4-10 f 20
Slide 42: Europcar's Pricing Discipline and Leadership
Europcar’s Pricing Discipline and Leadership RPD evolution in European car rental sector - YoY at constant exchange rates Avis Europe – HY and FY(*) Hertz International (**) Europcar 6% 4% Beginning of the economic downturn 2% 0% -2% 2009 average: +3.4% 2010 First 9 months: +3.9% -4% -6% Q3 08 Q4 08
Slide 43: Highly Variable Operating Cost Structure
Highly Variable Operating Cost Structure Nature Main Components Normative KPI Weight (Key Performance Indicator) Depreciation of on-balance sheet fleet Fleet holding Depreciation included in fleet operating lease Average fleet / Rental days Fleet costs costs rents ~ 38% (variable) Fleet holding cost
Slide 44: Strong Ability To Match Fleet With Demand And Optimize Fleet Costs
Europcar’s Strong Ability To Match Fleet With Demand And Optimize Fleet Costs Average fleet size evolution Fleet financial utilization rate1 evolution Base 100 2008 2009 2008 2009 2010 = Q1 2008 77.8% 140 Economic Downturn Starting in Q3 2008 78% 76.9% 130 76% 74.8% 74.4% 120 73.8% 110 74% 73 1% 73.
Slide 45: Europcar's Cost Base Flexibility
Europcar’s Cost Base Flexibility Europcar responded with cost reduction measures of unprecedented scope to the 2008/2009 economic downturn 2008/2009 Action Plan 2009 Impact Acceleration of the seasonal Average fleet: -15.3% vs. 2008 Fleet costs reduction of the fleet in Q4 (variable) 2008 and furthe
Slide 46: Preserving Footprint to Position for Rebound
Preserving Footprint to Position for Rebound Corporate Countries Franchise Network Total 2007 1,832 2007 1,517 2007 3,349 Europcar rental station 2008 1,833 2008 1,598 2008 3,431 network 2009 1,845 2009 1,657 2009 3,502 Investor Day 26/01/2011 46
Slide 47: Strong Profit Retention And Operating Leverage
Flexible Business Model: Strong Profit Retention And Operating Leverage Profit Retention2 Operating Leverage2 (Revenue decrease) (Revenue growth) Illustrative Year-on-Year change at 2009 2010 Normative constant exchange rates Full year First Half Full year €m % €m % €m 1 - Revenue (224) (11%) 34 +4%
Slide 48: Strong Margin Improvement In Growth Years
Strong Margin Improvement In Growth Years Resilience of the Operating Performance through the Downturn In million of € Revenue (€ m) Adjusted** operating margin 14.1% 12.4% 11.9% 2,500 11.5% 2,191* 2,122* 2,000 1,934* 1,851 1,500 1,000 500 0 2006 2007 2008 2009 2010 * Prepared on a pro forma basis;
Slide 49: Europcar's Fleet Financing Model
Europcar’s Fleet Financing Model Fleet Asset Base and Financing Structure Fleet asset base Net operating debt1 On-balance sheet On- Rental fleet Fleet financing Debt Balance (banking facilities, Sheet secured notes) Fleet working capital Off- Balance Fleet financed under Debt equivalent of operating
Slide 50: Fleet Financing Adjustable To Fleet Size
Fleet Financing Adjustable To Fleet Size Fleet Debt vs. Fleet Size Average Average Average net Average Fleet size ('000) fleet size operating debt1 Fleet Debt 240 3700 220 3200 200 2700 180 2200 160 140 1700 120 1200 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2009 2009 2009 2009 2010 2010 2010 f Asset-bac
Slide 51: Europcar's Corporate and Fleet Debt
Europcar’s Corporate and Fleet Debt Outstanding amount as of Capitalization Table September 30, 2010 Pro forma of Effect of 2010 Refinancings Committed (seasonal peak of as of September 30, 2010 amount fleet and related debt) On-Balance-Sheet 2013 Eur3m+350bps Senior subordinated secured floating ra
Slide 52: Average Cash Cost Of Debt To Decrease in 2012
Average Cash Cost Of Debt To Decrease in 2012 with New Swap Structure 2011 As from Jan. 2012 Swap payment rate 4.0% 4.0% 2.4% Corporate HY Notes c. 8.6% 7.7% to 7.9% Fleet financing debt c. 6.3% 5.4% to 5.6% f Estimates based on: - EURIBOR 1 month: 0.75% in 2011 and 1.50% in 2012 - Current projectio
Slide 53: Debt Maturities Extended After the 2010 Refinancings
Debt Maturities Extended After the 2010 Refinancings Outstanding Debt as of Sept. 30, 2010 - Pro forma before the 2010 refinancings In millions of € Corporate debt 593 (undrawn) Fleet debt 51 (undrawn) 1217 299(a) (drawn) (drawn) 506 425 375 2010 2011 2012 2013 2014 2015 2016 2017 2018 O t t di D Ou
Slide 54: Europcar's Fleet Capital Rotation And Financing
Europcar’s Fleet Capital Rotation And Financing Fleet Asset Base Average Net Operating Debt1 Average Net Operating Debt1 Total Revenue X Fleet Asset Base = Total Revenue 2008 1.48 X 0.88 = 1.31 2009 1.42 X 0.87 = 1.24 2010* 1.39 X 0.88 = 1.22 f 2008 Sudden drop in demand as from September: excess fl
Slide 55: Business and Financial Model: Take-Aways
Understanding Europcar’s Business and Financial Model: Take-Aways [ A flexible business model suited to seasonality and highly resilient to economic down-cycles (cost structure ca. 70% variable) [ Demonstrated pricing discipline and leadership through the 2008 – 2009 downturn ; operating leverage as
Slide 56: Agenda
Agenda Europcar and its Markets Europcar’s Business and Financial Model Europcar’s Ambition Q&A Investor Day 26/01/2011 56
Slide 57: Accelerate Topline Growth - Focus on Quality of Service
Accelerate Topline Growth - Focus on Quality of Service All staff is involved, trained and incentivised 10 - 9 Promoters 100% of customers receive 8 - 7 Neutral a survey by 2012 6 - 0 Detractors 80% of promoters by 2013 ► A Completely Satisfied Customer is 3 times More Likely to Rent Again than a So
Slide 58: Accelerate Topline Growth - Brand Awareness
Accelerate Topline Growth - Brand Awareness Spontaneous Awareness - Top 4 brands [ Stronger brand visibility - New brand communications identity - Roll out of new visual identity in stations [ New corporate brand positioning 5 (12%) Pro-cycling sponsorship investment z Europcar p title sponsor p of
Slide 59: Accelerate Topline Growth - Cross-Border Sales
Accelerate Topline Growth - Cross-Border Sales 2009 RPK revenue - CAGR 2009-2029 in % 2.8% Europcar presence (through international franchise network 4.3% 7.1% and strategic commercial alliance with Enterprise) 5.0% Corporate Countries 4.1% Partnerships 6.3% 5.0% Source: Boeing ► Strength of the Net
Slide 60: Accelerate Topline Growth - International Development
Accelerate Topline Growth - International Development Europcar Presence (through Corporate international franchise network and Partnerships Countries strategic commercial alliance with Enterprise) ►Opportunity to Further Develop in Fast Growing Countries: China, Thailand, Vietnam, Brazil, etc. Inves
Slide 61: Accelerate Topline Growth - Launch of Innovative Services
Accelerate Topline Growth - Launch of Innovative Services [ Privilege card program - Objective: Recognize and increase our customer loyalty - Target market: Corporate travelers - Launch date: January 2011 [ Car Choice concept tests in France and Germany - Objective: Provide more freedom to frequent
Slide 62: Accelerate Topline Growth - Launch of Innovative Services
Accelerate Topline Growth - Launch of Innovative Services [ Range of applications for iPhone, Nokia and Samsung in addition to a generic mobile application - Objective: Offer customers the full range of tools to transact with Europcar - Target market: Leisure and business customers seeking maximum f
Slide 63: Accelerate Topline Growth - Launch of Innovative Services
Accelerate Topline Growth - Launch of Innovative Services [ Objective: Enhance client intimacy through technological innovation to serve new urban mobility needs [ Target market: Urban customers looking to using rather than owning a car [ Launch date: March 2011 [ Concept: Spontaneous use - no reser
Slide 64: Accelerate Topline Growth - e-Business Initiatives
Accelerate Topline Growth - e-Business Initiatives New B-to-C New web site B-to-B 3-step booking, portal CO2 filter, maps and directions, etc. iPad / iPhone Self Mobile applications service kiosk Customers Microsoft Automated return Surface table hand-held solution ► Technology to Improve Customer E
Slide 65: Price Competitiveness Sustained By Continued Cost Efficiencies
Price Competitiveness Sustained By Continued Cost Efficiencies Revenue Network Initiatives Description Fleet and rental and HQ costs related costs costs - Enhancing and maintaining fixed cost reduction flexibility Process Re- engineering acquired during previous downturn period - Reassessment of str
Slide 66: Delivering Superior Performance
Delivering Superior Performance 2008/2010 2011/2013 GDP Average GDP growth1 (1.1%) 1.9% Rental Revenue CAGR2 - Quality of service - Brand awareness Rental Revenue Sustained - Cross border sales (3.0%) 6.0% to 6.5% - Innovative new services by - IT development & e-commerce e commerce - OEM relationsh
Slide 67: Overall Conclusion
Overall Conclusion [ Europcar is Europe's leader in an industry with strong potential [ Europcar has a business model fit for p p purpose in today's y and tomorrow's European and global markets [ Europcar's initiatives allow to continue growing revenue at a faster pace than industry average Investor
Slide 68: Agenda
Agenda Europcar and its Markets Europcar’s Business and Financial Model Europcar’s Ambition Q&A Investor Day 26/01/2011 68
Slide 69: Appendix
Appendix Investor Day 26/01/2011 69
Slide 70: Basis of Preparation of the Financial Information Presented
Basis of Preparation of the Financial Information Presented [ In accordance with IFRS 3, the accounting treatment of the acquisitions of PremierFirst (formally called “Vanguard EMEA”) on Feb. 28, 2007, Betacar on May 31, 2007 (consolidated as of Sept. 2007) and Europcar Australia-New Zealand, effect
Slide 71: Glossary
Glossary [ Financial utilization rate: [Number of invoiced days] divided by [Total potential invoice rental days (including fleet in preparation and maintenance)] [ Revenue per day (RPD): Rental revenue / Number of Invoiced days [ Cost per employee: Total employee costs / Average headcounts [ Averag
Slide 72: Investor Day
Investor Day January 26, 26 2011 Corporate Communications – Marine Boulot – marine.boulot@europcar.com – +33 (0)1 30 44 94 30 www.europcar.com
Slide 73: Europcar
Europcar [ Europcar is the leading vehicle rental company in Europe, providing car mobility to 6 million customers. Through its franchisees and partners in over 150 countries, Europcar gives access to the #1 network in car rental. [ Europcar brand portfolio generated revenue* of c.€3.1 billion inclu
Slide 74: Eurazeo Financial Agenda
Eurazeo Financial Agenda February 10, 2011 FY2010 Revenues March 25, 2011 FY2010 Results May 12, 2011 1st Quarter 2011 Financial Information August 31, 2011 1st Half 2011 Revenues & Results
Slide 75: About Eurazeo
About Eurazeo Research on Eurazeo Investor Relations contacts Alpha Value, Catherine Radiguer Carole Imbert Aurel Leven, Julien Guez cimbert@eurazeo.com Cheuvreux, Amandine Latour + 33 (0)1 44 15 16 76 Deutsche Bank, David Cerdan Sandra Cadiou Exane BNPParibas, Charles-Henri de