Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q3 2020 Earnings Presentation
28 slides from Avis Budget's earnings presentation, Oct 30, 2020
Slide 1: Avis Investor Presentation
Avis Investor Presentation October 30, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Non-GAAP Financial Measures Avis Budget Group (“Avis” or ”the Company”) emphasizes that statements about future results made in this presentation constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-
Slide 3: Agenda
Agenda • Company Overview • Financial Results & Update • Liquidity and Leverage Summary • Fleet Debt & ABS Tutorial • Safety & Strategy 3
Slide 4: Overview and Brands
Overview and Brands • We are a leading global provider of mobility solutions with a portfolio of premium and leisure car rental and sharing brands: - More than 11,000 rental locations in ~180 countries around the world. - Zipcar is the world's leading car sharing network with more than one million m
Slide 5: Diversified Revenue Stream
Diversified Revenue Stream 35% 36% Budget Off-Airport Brand 57% Airport Avis 64% 8% On-Airport Other 40% Commercial 30% International Customer Segment 60% Leisure 70% Americas All numbers are approximate as of year ended December 31, 2019 Budget brand includes Budget Truck. Other brands include Zipc
Slide 6: Attractive Financial Model
Attractive Financial Model Five-Year Adjusted Free Cash Flow ($ in millions) Powerful Adjusted Free Cash Flow Data is cumulative for years 2015, 2016, 2017, 2018 and 2019 and adjusted for the adoption of ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting“. 100% 25% 75% 25% Fixed Va
Slide 7: Agenda
Agenda • Company Overview • Financial Results & Update • Liquidity and Leverage Summary • Fleet Debt & ABS Tutorial • Safety & Strategy 7
Slide 8: Q3 2020 Results
Q3 2020 Results Revenue & Other Metrics • Revenue declined 44% to $1,534m in the quarter, $ Millions Revenue Adjusted EBITDA Reported but improved sequentially each month. July was down 50%, August was down 43%, and September $2,753 $471 finished down 37%. (44%) $885 $169 – Americas Revenue decrease
Slide 9: YTD 2020 Results
YTD 2020 Results Revenue & Other Metrics $ Millions Revenue Adjusted EBITDA Reported $645 • Year-to-date Revenue decreased 42% to $4.1b in constant currency. $7,010 $187 – Americas Revenue decreased 39% to (42%) $2,188 $2.9b, with Rental Days down 36% and Revenue per Day down 5%. $4,047 $508 – Inter
Slide 10: Significant Cost Removal Efforts & Dramatic Fleet Actions
Significant Cost Removal Efforts & Dramatic Fleet Actions • Third quarter expenses finished 39% lower than the prior year, as we removed $1.0 billion of costs in the last three months. • We have removed more than $2.0 billion of costs to date, well on our way to deliver $2.5 billion of cost savings
Slide 11: Ability to Match Fleet to Demand
Ability to Match Fleet to Demand • Unlike other travel-related industries, we have repeatedly demonstrated our ability to rapidly scale fleet to match demand. Total Company – Average Fleet vs. Rental Days 20% 0% % Change YoY (20%) (40%) (60%) (80%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 De
Slide 12: Agenda
Agenda • Company Overview • Financial Results & Update • Liquidity and Leverage Summary • Fleet Debt & ABS Tutorial • Safety & Strategy 12
Slide 13: Liquidity and Cash Burn
Liquidity and Cash Burn • Adjusted Free Cash Flow for the quarter was positive $100 million1, driven by our record fleet sales and successful cost removal strategies. • We ended the quarter with $2.4 billion in liquidity. • Excluding the return of vehicle equity, we anticipate both positive Adjusted
Slide 14: Corporate Debt Overview
Corporate Debt Overview Covenant Relief and Financial Management • On April 27th, we amended our Credit Agreement providing for the suspension of their leverage maintenance covenant through June 2021 and allowing additional first lien indebtedness of $750 million. • On May 12th, we issued $500 milli
Slide 15: Agenda
Agenda • Company Overview • Financial Results & Update • Liquidity and Leverage Summary • Fleet Debt & ABS Tutorial • Safety & Strategy 15
Slide 16: Fleet Debt Overview
Fleet Debt Overview Structural Highlights • Our vehicle securitization debt is comprised of ABS term debt and bank conduit facilities around the world. • We were in compliance with all requirements as of the end of the quarter, and did not require equity injections. • Our ABS maturities have a six m
Slide 17: ABS Structure – One Vehicle Example
ABS Structure – One Vehicle Example 110 • Assume a vehicle is purchased for $100 and financed through our ABS structure 100 100 at 80%, or $80. Illustrative Vehicle / Debt Value (in dollars) • GAAP depreciation is ~1% per month; 90 over 18 months is ~18%, resulting in a residual value of $82. 82 80
Slide 18: ABS Depreciation vs Residual Decline
ABS Depreciation vs Residual Decline ABS Minimum ABS Compliance ABS Monthly Effective Our GAAP Net 1% Residual Value Drop from Residual Month Monthly Depreciation NBV Depreciation Rate Book Value our GAAP Net Book Value Value 0 - $25,000 1.67% $25,000 - $25,000 … 10 418 20,825 2.00% 22,500 225 22,27
Slide 19: Maintenance Covenant Performance
Maintenance Covenant Performance 125.0% 120.0% 115.0% 110.0% 105.0% 100.0% 95.0% Mark-to-Market Test Disposition Test AESOP Minimum Required Performance • The required mark to market test for our AESOP program utilizes a three month weighted average of vehicle values in our fleet compared to NADA Bl
Slide 20: Agenda
Agenda • Company Overview • Financial Results & Update • Liquidity and Leverage Summary • Fleet Debt & ABS Tutorial • Safety & Strategy 20
Slide 21: Our Unwavering Commitment to Safety
Our Unwavering Commitment to Safety The Avis Safety Pledge is our commitment to keep you safe. We’ve built strategic partnerships with RB, the maker of Lysol, and health experts to provide the latest guidance and best practices for disinfecting vehicles, training our employees and helping to protect
Slide 22: Longer Term: Six Areas of Strategic Focus
Longer Term: Six Areas of Strategic Focus • Our strategic priorities remain unchanged despite the pandemic. Local Market, Ride-hail, and Alternative Disposition Customer Experience Package delivery Channels Connected Cars and International Integration Organizational Efficiencies Technology 22
Slide 23: Appendix
Appendix
Slide 24: Definitions
Definitions This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons why we present these non-GAAP financial measures and a description of what they represent. The GAAP measures most directly
Slide 25: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Three Months Ended September 30, 2020 2019 Net income $ 45 $ 189 Provision for income taxes 8 139 Income before income taxes 53 328 Add certain items: Restructuring and other related charges 17 22 Acqu
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to adjusted net income (in millions, except per share data): Three Months Ended September 30, 2020 2019 Net income $ 45 $ 189 Add certain items, net of tax: Restructuring and other related charges 14 17 Acquisition-related amortization
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income (loss) to Adjusted EBITDA (in millions): Twelve Months Ended September 30, 2020 2019 Net income (loss) $ (452) $ 173 Provision for (benefit from) income taxes (355) 103 Income (loss) before income taxes (807) 276 Add certain items: Res
Slide 28: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of loss before income taxes to Adjusted Free Cash Flow (in millions): Nine Months Ended Six Months Ended September 30, 2020 June 30, 2020 Loss before income taxes $ (821) $ (874) Add-back of non-vehicle related depreciation and amortization 214 140