Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q1 2020 Earnings Presentation
24 slides from Avis Budget's earnings presentation, May 5, 2020
Slide 1: Avis Investor Presentation
Avis Investor Presentation April 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 • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 3
Slide 4: Our Management Team
Our Management Team Title Years of Industry Experience Joe Ferraro Interim Chief Executive Officer 40 John North Chief Financial Officer 18 Treasurer David Calabria SVP of Corporate Finance 15 4
Slide 5: 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 6: 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 7: 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 8: Agenda
Agenda • Company Overview • Q1 Results & Update • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 8
Slide 9: Q1 2020 Results
Q1 2020 Results Revenue & Other Metrics Revenue Adj. EBITDA ($ in millions)Reported • Revenue declined to ~$1.75 billion in the $1,920 $1,750 (9%) ($1) quarter, ~$170 million lower than prior year, driven by 7% fewer Rental Days and $500 1% lower Revenue per Day. ($90) – Americas Revenue decreased 5
Slide 10: Airport/Off-Airport Revenue Changes April YoY
Airport/Off-Airport Revenue Changes April YoY • The pandemic has severely impacted air travel and airport demand. This is anticipated to continue into May and will begin to recover in June and improve in the balance of the year. • Expansion into the Off-Airport market has tempered the revenue declin
Slide 11: Significant Cost Removal Actions
Significant Cost Removal Actions • We have removed an estimated $2.0 billion in annualized costs and continue to look for additional savings. • Major Actions: • People: We laid off or furloughed approximately 70% of our workforce, or ~21,000 employees. Also, we reduced VP and above compensation, fro
Slide 12: 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% 10% % Change YoY 0% (10%) (20%) (30%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-
Slide 13: Liquidity and Cash Burn
Liquidity and Cash Burn • We are projecting an operational cash burn for the months of April, May, and June to be ~$400 million, ~$250 million, and ~$150 million, respectively. • We expect cash burn to sequentially improve due to aggressive cost mitigation and fleet reduction actions. • Our operatio
Slide 14: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 14
Slide 15: Liquidity and Leverage Summary
Liquidity and Leverage Summary • We have no material corporate debt maturities until 2023 and do not need to refinance any fleet debt in 2020. We plan to finance the routine 2020 ABS maturities with program cash on hand. • As a result, based on current operational assumptions, we have sufficient liq
Slide 16: Corporate Debt Overview
Corporate Debt Overview Covenant Relief and Improved Financial Management • On April 27th, we amended our Credit Agreement providing for the suspension of our leverage maintenance covenant through June 2021 and allowing additional first lien indebtedness of $750 million, among other things. • In con
Slide 17: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 17
Slide 18: Fleet Debt Overview
Fleet Debt Overview Structural Highlights • Our ABS minimum depreciation payment is 1.67% on each vehicle monthly, compared with a GAAP depreciation rate of ~1%. This equates to ~50% more cash depreciation per vehicle each month. • Our maintenance covenant requires the three month trailing average c
Slide 19: 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 20: U.S. Fleet Funding Example – FY 2019
U.S. Fleet Funding Example – FY 2019 • ABS term debt is consistently funded to support minimum fleet levels. • Bank conduit facilities are utilized to seasonally scale required fleet. • Required vehicle equity at peak fleet is held constant regardless of seasonality. 12,000,000 10,000,000 Vehicle De
Slide 21: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 21
Slide 22: Capitalizing on the Recovery
Capitalizing on the Recovery • On an annualized basis, management decisions have driven an estimated $2 billion in cost savings, with further reductions in process. • These actions position us to drive higher margin as demand returns. • Exploring US and International governmental assistance programs
Slide 23: Laser-Focused on Safety
Laser-Focused on Safety • As shelter in place restrictions are lifted, we believe leisure travel demand may prefer private transportation to mass transit. • We have a unique opportunity to provide a potentially safer alternative to traditional modes of transportation and ride-hail. • We are emphasiz
Slide 24: 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 24