Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Q4 2017 Earnings Presentation
20 slides from Hertz Global's earnings presentation, Feb 28, 2018
Slide 1: 4Q 2017 Earnings Call
1 4Q 2017 Earnings Call February 28, 2018 8:00 am 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: Key Metrics and Non-GAAP Measures
3 Key Metrics and Non-GAAP Measures THE FOLLOWING KEY METRICS AND 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 diluted earnings (loss) per share (Adjusted diluted EPS)
Slide 4: Agenda
4 Agenda BUSINESS OVERVIEW Kathryn Marinello President & Chief Executive Officer Hertz Global Holdings, Inc. FINANCIAL RESULTS OVERVIEW Tom Kennedy Chief Financial Officer Hertz Global Holdings, Inc. 4Q
Slide 5: NA Turnaround Progress Evident in 2017
5 NA Turnaround Progress Evident in 2017 4Q 2H:17 YoY U.S. RPD, utilization, RPU, monthly depreciation per unit improve vs. 2H:16 Fleet • Optimized car-class mix • Successful model year 2018 negotiations • Managing growth in ride-hailing demand • Increased remarketing capability Momentum is Broad Ba
Slide 6: Quarterly Overview
6 Quarterly Overview TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 7: 4Q/FY:17 Consolidated Results
7 GAAP 4Q:17 Results 4Q:16 Results YoY % Inc/(Dec) FY:17 Results FY:16 Results YoY % Inc/(Dec) Total revenues $2,091M $2,009M 4% $8,803M $8,803M 0% Income (loss) from continuing operations before income taxes $(179)M $(466)M 62% $(575)M $(470)M (22%) Net income (loss) from continuing operations $616
Slide 8: 2H:17 Results Improved Significantly from 1H:17
8 2H:17 Results Improved Significantly from 1H:17 4Q 1H:17 Results YoY % Inc/(Dec) 2H:17 Results YoY % Inc/(Dec) Total Revenues $4,140M (3%) $4,663M 2% Adjusted Corporate EBITDA ($75)M (135%) $342M 0% US RAC Total RPD $41.23 (2%) $42.83 1% US RAC Total RPU $968 (6%) $1,062 1% US RAC Vehicle Utilizat
Slide 9: 4Q:17 U.S. RAC Revenue Performance
9 4Q:17 U.S. RAC Revenue Performance Revenue Days Total RPD Vehicle Utilization (bps) Capacity Total RPU 0% (2%) (4%) 1% (4%) (1%) 2% (1%) (130)(100) (2%) 3% 1% (3%) U.S. RAC (YoY quarterly results1) 1Revenue is defined as total revenue excluding ancillary retail vehicle sales revenue; Capacity is a
Slide 10: 4Q:17 U.S. RAC Fleet
10 4Q:17 U.S. RAC Fleet Continued focus on optimizing our fleet profile 4Q • Vehicle utilization was 81% vs 78% in 4Q:16 • New analytic tools and optimized fleet capacity aligned fleet with customer demand - Core rental fleet decreased 4% YoY - Ride-hailing fleet grew to 22,000 vehicles as of year e
Slide 11: 4Q:17 U.S. RAC Monthly Depreciation Per Unit
11 4Q:17 U.S. RAC Monthly Depreciation Per Unit $321 $306 $302 $269 $303 $278 $304 $321 Q4'16 Q1'17 Q2'17 Q3'17 Q4'17 Current Year Prior Year +15% +27% +19% 4Q $348 YEAR OVER YEAR TREND CONTINUES TO IMPROVE $353 +1% (6%) • Continued transition to a richer, more preferred vehicle mix • Lower model ye
Slide 12: FY:17 US RAC Monthly Vehicle Depreciation Per Unit
12 FY:17 US RAC Monthly Vehicle Depreciation Per Unit 4Q 7 12 26 8 11 Wholesale / Rebalancing FY:16 Richer Fleet Mix Core Residual Fleet Acquisition Cost Other FY:17 $301 $327
Slide 13: 4Q:17 U.S. RAC Fleet Sales Initiative
13 4Q:17 U.S. RAC Fleet Sales Initiative 29% 34% 37% 4Q:16 Non-Program Vehicle Disposition Channel Mix 4Q 27% 35% 38% Auction Retail Dealer Direct 4Q:17 Focused on Driving More Sales Through Alternative Channels • Absolute sales through highest-return retail channel grew 6% in 4Q:17 • FY:17 largest
Slide 14: 4Q:17 International RAC
14 4Q:17 International RAC 4Q • Revenue increased 10%, or 4% YoY excluding foreign exchange • Revenue ex-Brazil increased 13%, or 7% YoY excluding foreign exchange − Transaction days increased 1%, or 6% excluding Brazil operations1 − Total RPD growth driven by improved pricing environment in Austral
Slide 15: Liquidity / Balance Sheet Overview
15 LIQUIDITY / BALANCE SHEET OVERVIEW TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 16: YE:17 HGH Consolidated Debt
16 YE:17 HGH Consolidated Debt 57% 43% Vehicle Debt 65% 35% Total Debt 85% 15% Fixed Rate Debt Floating Rate Debt 4Q Non-Vehicle Debt Notes: YE fixed rate debt ratio at highest level because total vehicle debt is at seasonally lowest level 100 bps change in YE:17 net floating rate debt = $44M change
Slide 17: YE:17 Liquidity Overview
17 YE:17 Liquidity Overview Corporate Liquidity at December 31, 2017 $ in millions • Corporate liquidity increased by $232M in 4Q:17 • Redeemed $450 million of senior notes due 2019 in December 2017 • Issued $1.0 billion of 5 year term ABS in January 2018 • Higher unrestricted cash balance reflects,
Slide 18: Corporate Debt Maturity Profile is Well Laddered
18 Corporate Debt Maturity Profile is Well Laddered December 31, 2017 Hertz Global Non-Vehicle Debt Maturity Profile1 1 Excludes $27M of promissory notes due 2028 and $11M of capital leases. $ in millions $700 $500 $500 $800 $1,250 $14 $14 $14 $14 $14 $618 $1,167 2018 2019 2020 2021 2022 2023 2024 S
Slide 19: First Lien Financial Maintenance Covenant
19 First Lien Financial Maintenance Covenant Consolidated First Lien Leverage Ratio as of December 31, 2017 was 1.9x 1 TTM adjusted corporate EBITDA defined as $267M reported LTM adjusted corporate EBIDTA + $123M adjustments as per credit agreement 2 Actual unrestricted cash on the balance sheet as
Slide 20: Q&A
20 Q&A
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