Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Investor Presentation (October 2011)
35 slides from Avis Budget's investor presentation, October 2011
Slide 1: Presentation to Investors October 2011
Presentation to Investors October 2011
Slide 2: Forward-Looking Statements
FORWARD- FORWARD- LOOKING STATEMENTS Statements St t t about b t future f t results lt maded iin thi this presentation t ti constitute tit t fforward-looking d l ki statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projecti
Slide 3: What Distinguishes Avis Budget Group?
WHAT DISTINGUISHES AVIS BUDGET GROUP? GROUP Leading vehicle rental company Investing for profitable growth Expanding with the acquisition of Avis Europe Driving revenue and earnings 3
Slide 4: Leader in the Global Vehicle Rental Industry
LEADER IN THE GLOBAL VEHICLE A Global Leader with a Dual- Dual-Brand Strategy RENTAL INDUSTRY $7 billion annual revenue Serving more than 80% of the Fortune 500 27 million transactions a year T highly Two hi hl recognized i d bbrands d 115 million vehicle rental days Meeting commercial and leisure t
Slide 5: Dual-Brand Strategy
DUAL-BRAND DUAL- STRATEGY Brands One Cost Structure Two Brands, Customer Touchpoints Customer Touchpoints Shared services Airport counters and busing Airport counters and busing generate more than Loyalty programs Loyalty programs $100 million in cost Reservations and marketing Reservations and mark
Slide 6: Multiple Revenue Sources
MULTIPLE REVENUE SOURCES Avis vs. Budget 70% 30% Avis and Budget have Commercial vs. Leisure 50% 50% complementary demand patterns due to their different customer focus On--Airport vs. On vs Off- Off-Airport 70% 30% Domestic vs. International 60% 40% Note: Pro forma for the acquisition of Avis Europ
Slide 7: Providing Vehicle Rental Services Throughout the United States
PROVIDING VEHICLE RENTAL SERVICES A Leading U S Vehicle Rental Company U.S. THROUGHOUT THE UNITED $4 billion in annual revenue STATES Accounts for three of every ten airport rentals More than 90% of the car rental revenue generated by the Avis and Budget M More th than 44,000 000 vehicle hi l rental
Slide 8: More Than Just Domestic Vehicle Rental
MORE THAN JUST DOMESTIC Profitable International Segment VEHICLE RENTAL $2.5 billion in annual revenue Corporate locations in 17 key countries Leading airport shares ― #1 in Australia(a) Li Licensees in i more than th 150 countries ti ― #1 in the Middle East and Africa(b) Significant contribution to
Slide 9: We Made the Difficult Choices During the Recession
WE MADE THE DIFFICULT Reduced CHOICES unprofitable volume DURING THE Closed Reduced RECESSION unprofitable headcount locations Achieved pre- pre-recession Grew Realigned Adjusted EBITDA in 2010 ancillary ill sales and despite revenues that revenues Significant marketing were $800 million lower margi
Slide 10: Substantially Lowering Our Costs
SUBSTANTIALLY LOWERING OUR Annual Cost Savings g COSTS . . . $600 $565-5750 $510 $55--65 $55 Cost reductions implemented in 2008- 2008-09 $500 generate more than $325 ($$ in millions) million in annual savings $415 Performance Excellence process--improvement process $400 initiative expected to produ
Slide 11: Without Sacrificing Quality
. . . WITHOUT SACRIFICING Peak Transactions p per Customer QUALITY Headcount Employee(a) Satisfaction(b) Up Up Avis honored at 2010 10% 4% World Travel Awards as Down D best business car rental 32% company Retained 99% of commercial accounts in 2009 and 2010 2008 2010 2008 2010 2008 2010 (a) Domesti
Slide 12: What Distinguishes Avis Budget Group?
WHAT DISTINGUISHES AVIS BUDGET GROUP? GROUP Leading vehicle rental company Investing for profitable growth Expanding with the acquisition of Avis Europe Driving revenue and earnings 12
Slide 13: Pursuing Key Strategic Initiatives
PURSUING KEY STRATEGIC INITIATIVES Increased focus as Sustained Magnittude of Strrategic Chaange earlier initiatives Long--term Long implemented Initiatives Over-riding goals are to Over- Evolutionary accelerate growth, growth Value capitalize on profitable opportunities, pportunities, leverage Enha
Slide 14: Increasing Brand Investment
INCREASING BRAND INVESTMENT Integrated marketing campaign for Avis including significant media presence Print, television, on on--line and airport signage Reinforces ‘We try harder’ mantra with a Avis renter Steve Townsend left a shoe in his rental. Avis employee Bob Noll found it and mailed it back
Slide 15: Accelerating Efforts to Win Small Business Customers
ACCELERATING EFFORTS TO WIN SMALL Fastest-Growing Segment of the Economy Fastest- BUSINESS CUSTOMERS Roughly six million U.S. small businesses(a) One million rent cars for business We enrolled over 50,000 small business S di $1 billi Spending billion annually ll customers in 2010 Our small business
Slide 16: Capitalizing on Local Market Opportunities
CAPITALIZING ON LOCAL MARKET $10 Billion U S Local Market U.S. OPPORTUNITIES Fastest-growing part of the car rental market Half of our customers don’t use us off-airport Our off off--airport revenue totaled more than $750 million in 2010 D l b di select Dual-branding l t llocations ti Co-branded mor
Slide 17: Using Self-Service Technology to Innovate
USING SELF- SELF- SERVICE TECHNOLOGY TO INNOVATE Enables our customers to rent in ways that are convenient to them and enables us to place vehicles where our customers need them Expect to have 30,000 cars equipped by mid mid-- 2012 Renting Vehicles at Unstaffed Locations 17
Slide 18: Applying Technology to Optimize Fleet Costs
APPLYING TECHNOLOGY TO OPTIMIZE FLEET COSTS Acquisition Deployment Disposition Program vs. risk Geographic Timing Investing in systems to carefully manage the allocation millions of fleet fleet--related Seasonal needs Location decisions we make each Mileage and usage year Car class mix Channel O vs.
Slide 19: What Distinguishes Avis Budget Group?
WHAT DISTINGUISHES AVIS BUDGET GROUP? GROUP Leading vehicle rental company Investing for profitable growth Expanding with the acquisition of Avis Europe Driving revenue and earnings 19
Slide 20: Expanding with the Acquisition of Avis Europe
EXPANDING WITH THE ACQUISITION OF Strategically and Financially Attractive AVIS EUROPE Reunites our world-class brands globally Increased presence in faster-growing markets Background: Avis Europe was an independent E Expected t d to t be b accretive ti tot earnings i (a) company, operating the Avis
Slide 21: Combining the Two Companies Provides Significant Benefits
COMBINING THE TWO COMPANIES PROVIDES Multiple Sources of Synergies SIGNIFICANT BENEFITS Consolidation of fixed-cost infrastructure Unifies relationships with multi-national accounts Synergies expected to exceed $30 million a year, primarily due to C Consolidated lid t d procurementt cost savings ― R
Slide 22: Meaningful Opportunity to Grow International Revenue
MEANINGFUL OPPORTUNITY TO GROW Locations in More Than 175 Countries INTERNATIONAL REVENUE Strategic ventures in high--growth regions high Licensee network provides long long--term external growth potential Owned Territories Licensed and JV Territories 22
Slide 23: Maximizing the Power of Global Brands
MAXIMIZING THE POWER OF GLOBAL Highly Profitable Inbound/Outbound Opportunity BRANDS Higher revenue per day Strong ancillary revenue penetration U.S. inbound revenue increased 15% in first half 2011 F t Faster-growing i d demand d Acquisition of Avis Europe offers larger Europe opportunity to captur
Slide 24: Significant Opportunities in Rapidly Growing Markets
SIGNIFICANT OPPORTUNITIES IN RAPIDLY Largest International Car Rental Company in China GROWING MARKETS More than $75 million of profitable revenue Outstanding partner Joint venture in China is 50% owned, owned formed in Rapid p growth g trajectory j y 2001 Expect to have 100 locations by end of 2012
Slide 25: Licensee Revenue Provides Annuity-Like Cash Flow Stream
LICENSEE REVENUE PROVIDES Avis Europe Licensee Operating Profit(a) ANNUITY--LIKE ANNUITY ($ in millions) CASH FLOW STREAM $52 $53 $46 Diverse licensee $44 network 2007 2008 2009 2010 (a) € converted to $ at the average 2010 exchange rate of 1.327 25
Slide 26: What Distinguishes Avis Budget Group?
WHAT DISTINGUISHES AVIS BUDGET GROUP? GROUP Leading vehicle rental company Investing for profitable growth Expanding with the acquisition of Avis Europe Driving revenue and earnings 26
Slide 27: Marketing Partnerships Drive Incremental Revenue
MARKETING PARTNERSHIPS DRIVE INCREMENTAL REVENUE Generate millions of transactions each year through affiliations 27
Slide 28: Instilling a Sales Culture to Drive Growth
INSTILLING A SALES CULTURE TO Ancillary and Upsell Revenue per Rental Day(a) DRIVE GROWTH Ancillary products and upsells carry substantially higher operating margins 2006 2007 2008 2009 2010 (a) Domestic; excluding gasoline and customer pass-throughs 28
Slide 29: Maintaining Strong Liquidity
MAINTAINING STRONG LIQUIDITY No Corporate Debt Maturities Until 2014 ($ in millions) $1,065 $870 $345 $600 $450 $450 $395 $250 $375 $420 $270 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Term loan Senior notes Convertible notes 29
Slide 30: Strong Start to 2011
STRONG START TO 2011 Record First Half Results Revenue increased 8% year-over-year Adjusted EBITDA doubled to $274 million(a) First half results: – Volume increased 8% M i expanded Margins d dbby nearly l 500 b basis i points i t – Revenue per day declined 2% Strategic initiatives contributed to gro
Slide 31: Positioned Well for Continued Growth in Global Travel
POSITIONED WELL FOR CONTINUED Record Third Quarter 2011 Results Expected GROWTH IN GLOBAL Revenue increase of 7-8% TRAVEL Per-unit fleet costs down approximately 20% Domestic rental volume projected to increase 4- 4-6% in Adj t d EBITDA increase Adjusted i off 21-26% 21 26%(a) the fourth quarter Str
Slide 32: Avis Europe Performance Provides Solid Foundation
AVIS EUROPE PERFORMANCE PROVIDES SOLID Strong First Half Results FOUNDATION Rental revenue increased 6% Costs well controlled Acquisition completed on October 3 M i expanded Margins d d year-over-year Favorable demand trends for summer peak 32
Slide 33: Summary
SUMMARY Positive Outlook Demand trends remain positive Used car market conditions are favorable Intense focus on growingrrevenue growing revenue, revenue, profits and brand equity C ti i ffocus on rigorous Continuing i costt controls t l Acquisition of Avis Europe is a watershed event 33
Slide 34: Avis Budget Group
avis budget group
Slide 35: Glossary
GLOSSARY This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons we present these non-GAAP financial measures, a description of what they represent and a reconciliation to the most comparable
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