Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q2 2014 Earnings Presentation
25 slides from Avis Budget's earnings presentation, Aug 5, 2014
Slide 1: Second Quarter 2014 Earnings Call
Second Quarter 2014 Earnings Call August 5, 2014 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (402) 220-9757 Passcode: Avis Budget
Slide 2: Forward-Looking Statements
FORWARD- LOOKING Statements about future results made in this presentation constitute forward-looking STATEMENTS statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include projections. These statements are based on current expectati
Slide 3: Ron Nelson, Chairman and Chief Executive Officer
Ron Nelson Chairman and Chief Executive Officer
Slide 4: Second Quarter 2014 Highlights
SECOND QUARTER 2014 Increased Pricing and Strategic Initiatives HIGHLIGHTS Driving Profitability Revenue grew 10% and earnings per share(a) grew 36% North America pricing and volume growth accelerated Achieved incremental synergies from acquisitions Repurchased $75 million of stock (a) Exclu
Slide 5: North America – Pricing
NORTH AMERICA – Strong Pricing Trends PRICING North America Pricing(a) +6% +4% First phase of integrated Demand-Fleet-Pricing +2% system now deployed in more than 100 markets, increasing our agility Commercial Leisure Total (b) Positive pricing both on- and off- airport and in each brand Meaning
Slide 6: North America – Volume
NORTH AMERICA – Volume Trends Strengthened in the Quarter VOLUME Rental days increased 8% Ancillary revenue per day increased 5% Local market growth driven by general-use and Proprietary website and direct connect channels’ commercial rentals percentage of volume increased almost 300 basis poi
Slide 7: Zipcar
ZIPCAR Taking Steps Today to Capture Future Opportunities Delivering incremental synergies Moved more than 1,000 vehicles to Zipcar for summer surge Launched Zipcar in five cities, 18 universities Zipcar added to AARP partnership and six airports this year Zipcar beginning to sign corporate
Slide 8: International
INTERNATIONAL Growing Revenue Amid Mixed Economic Backdrop EMEA revenue increased 4% ‒ Total revenue per day increased 1% (a) ‒ Budget revenue grew nearly 30% Launched new Avis website in the UK ‒ Ancillary revenue per day increased 13% Launched new Avis TV ‒ Record second-quarter utilization camp
Slide 9: 2014 Outlook – Third Quarter
2014 OUTLOOK – THIRD QUARTER Expect to Report Record Third Quarter Results North America ‒ Postive demand and pricing continuing into the summer Nearly 125,000 recalls so far in 2014, compared ‒ Pricing in July increased 4% to approximately 70,000 in all of 2013 ‒ Recalls affecting labor costs, ut
Slide 10: 2014 Outlook – Full Year
2014 OUTLOOK – FULL YEAR Raising Our Revenue and Earnings Projections North America – Expect 5-7% volume growth in 2014 – Full-year pricing projected to increase approximately 2% EMEA – Expect 3-5% volume growth – Plan to drive revenue growth through our Budget brand, ancillary sales and digital
Slide 11: Capital Allocation
CAPITAL ALLOCATION Uses of Free Cash Flow Share repurchases ‒ Repurchased $150 million of stock year-to-date ‒ Expect to purchase $225 - $300 million of outstanding shares in 2014 Tuck-in acquisitions ‒ Acquired 11 airport locations from Advantage in June ‒ Deal pipeline is modest ‒ Unlikely to
Slide 12: David Wyshner, Chief Financial Officer
David Wyshner Senior Executive Vice President and Chief Financial Officer
Slide 13: Second Quarter 2014 Results
SECOND QUARTER 2014 Increased Adjusted EBITDA Margin RESULTS ($ in millions) Revenue Adjusted EBITDA $2,194 $213 Second-highest second- +10% quarter Adjusted $2,002 +19% EBITDA in our history $179 Earnings per share of 68 cents, excluding certain 9.7% items margin 8.9% margin Second Quarter Second Q
Slide 14: Second Quarter 2014 Results – North America
SECOND QUARTER 2014 Volume and Pricing Increased RESULTS – NORTH AMERICA (year-over-year change) Rental Days Average Daily Rate Total Revene +12% Ancillary revenue per (b) day increased 5% Pricing increased 5% excluding Payless +8% and currency +3% (a) Rental Days Average Total (a) Daily Rate Revenu
Slide 15: Second Quarter 2014 Results – North America
SECOND QUARTER 2014 Volume and Pricing Increased RESULTS – NORTH AMERICA Excluding Including Payless Payless Average Average (year-over-year changes) Rental Days Rental Days Daily Rate Daily Rate Payless contributed Leisure +2% +6% +8% +4% $31 million of revenue and $5 Commercial +7% +2% +7% +2% mil
Slide 16: Second Quarter 2014 Results – International
SECOND QUARTER 2014 Revenue Increased due to RESULTS – Higher Volumes and Ancillary Revenue INTERNATIONAL (year-over-year change) Rental Days Total Revenue per Day Total Revene +7% Adjusted EBITDA declined slightly, but increased $4 million excluding currency effects +3% +3% Ancillary revenue per (b
Slide 17: Second Quarter 2014 Results – Truck Rental
SECOND QUARTER 2014 Substantial Pricing and Utilization RESULTS – Improvements TRUCK RENTAL (year-over-year change) Average Daily Rate Utilization Revenue per Vehicle 12% Average fleet is 12% smaller than a year ago 8% Revenue declined 2% due to lower average fleet 4% Average Utilization Revenue Dai
Slide 18: Fleet Costs
FLEET COSTS Fleet Costs Have Normalized Monthly Per-Unit Fleet Costs (North America) $302 $306 +1% $300 - $310 $299 +0-3% Selling approximately 25% of our risk vehicles through alternative disposition channels Fleet optimization system driving results Second Quarter Second Quarter Full Year Full Yea
Slide 19: Technology
TECHNOLOGY Largest Investment in Company History Demand-Fleet-Pricing (yield management) Wizard modernization ‒ Standardizing systems and adding functionality Projects are enhancing the Upgrading mobility platforms and websites customer experience and driving efficiency Increasing operationa
Slide 20: Balance Sheet
BALANCE SHEET Strong Liquidity Position $2.4 billion of available liquidity at quarter-end Net corporate leverage of 3.4x (a) Issued $400 million of senior notes with a yield Quarter-end cash of just over 5% balance of $537 million – Redeemed remaining 8.25% senior notes Debt refinancing rem
Slide 21: 2014 Outlook
2014 OUTLOOK 2014 Estimates Raised (a) (b) ($ in millions, except EPS) Projection Growth vs. 2013 Expect cash taxes of Revenue $8,600 – $8,700 9% approximately $70 million Adjusted EBITDA 860 – 910 15% Expect capital Non-vehicle D&A 150 expenditures of approximately $200 Interest expense 210 million
Slide 22: Summary
SUMMARY Positioned for Earnings and Margin Growth Volume and pricing growth in North America – Leisure and commercial rentals both contributing Positive International revenue growth despite economic conditions Strategic initiatives continuing to generate benefits – Ongoing investment in techno
Slide 23: avis budget group
avis budget group
Slide 24: 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
Slide 25: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): June 30, 2014 Corporate debt $ 3,388 Less: Cash and cash equivalents 537 Net corporate debt $ 2,851 Reconciliation of Adjusted EBITDA excluding certain items (in millions): LTM Ended June 30, 2014 Adjusted EBITDA $ 827 Less: Non-vehicle re