Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q3 2019 Earnings Presentation
33 slides from Avis Budget's earnings presentation, 2019
Slide 1: Third Quarter 2019
avis budget group Third Quarter 2019
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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-looking statements include projections. These statements are based on current expectatio
Slide 3: A Global Leader in Vehicle Services
A Global Leader in Vehicle Services 30 COUNTRIES We are committed to Plus 150 licensee operated providing on-demand mobility services for 11,000 LOCATIONS customers, businesses Including 4,600 licensee operated and cities alike. You will 648,000 VEHICLES find us at the intersection where technology
Slide 4: Diversified Revenue Stream
Diversified Revenue Stream 34% 35% Budget Off-Airport Brand Airport 58% 65% Avis On-Airport 8% Other 40% 30% Commercial International Customer Region 60% 70% Leisure Americas All numbers are approximate as of year ended December 31, 2018 Budget brand includes Budget Truck. Other brands include Zipca
Slide 5: Connected Mobility Strategy
Connected Mobility Strategy
Slide 6: Global Brand. Pipeline of Margin
———— - 9 GLOBAL BRAND. PIPELINE OF MARGIN PORTFOLIO & EXPERIENCE EXPANSION INITIATIVES avis budget group CONNECTED BUSINESS NEW MOBILITY-OPPORTUNITIES ‘AND PLATFORM Q3 2019 avis budget group
Slide 7: Global Brand Portfolio
Global Brand Portfolio Q3 2019 7
Slide 8: Innovation Initiatives
Innovation Initiatives Enhancing Mobility 1) Technology - Modernizing legacy system infrastructure - Building next generation platform 2) Connected car - Creating largest global connected fleet 3) Strategic partnerships ₋ Waymo ₋ Fetch ₋ Lyft ₋ Otonomo ₋ Via ₋ Uber Q3 2019 8
Slide 9: 1) Technology
1) Technology • Modernizing Legacy System Infrastructure - Platform enhancements for improved operations - Migrating to cloud for speed and efficiency • Redesigned Avis and Budget Apps - Enhances ease of use and customer experience - Introduced split billing - Partnered with Arrive for in-app parkin
Slide 10: Next Generation Platform
Next Generation Platform • We have designed and are building a new mobility platform in the cloud. • This platform will lower costs, scale systems on demand, and greatly reduce time to market. • It enables us to support innovative partnerships and accelerate the implementation of new products and of
Slide 11: 2) Connected Car
2) Connected Car 200,000 Q4 19 160,000 Fuel Optimization Q3 19 150,000 • At the time of rental return, fuel is automatically • Reduced lost revenue and higher utilization due Q2 19 measured to 1/10th of a gallon to fewer monthly average missing vehicles • We are realizing well over a dollar net bene
Slide 12: 3) Strategic Partnerships
3) Strategic Partnerships • Connected over 160,000 vehicles, and progressing toward a globally connected fleet • Strategic revenue partnerships unlocking top line growth opportunities • Expanding partnerships with alternate mobility offerings Q3 2019 12
Slide 13: Margin Expansion Initiatives
Margin Expansion Initiatives 1) Profitable Revenue - Directing focus toward revenue generation and higher margin opportunities 2) Fleet Optimization - Leveraging our fleet analytics to drive change in the way we buy, use, and sell fleet 3) Operational Efficiencies - Driving operational improvements
Slide 14: 1) Profitable Revenue
1) Profitable Revenue • Fully implemented revenue management system • Increase direct digital revenue - Direct bookings - Pre-paid rentals • Expand marketing partnerships • Loyalty programs • Reorganized sales team to focus on higher-margin segments Q3 2019 14
Slide 15: 2) Fleet Optimization
2) Fleet Optimization • Optimize fleet mix - Changes to the way we buy and sell fleet including makes, models, and trim levels • Leverage data analytics from our mileage optimization initiative to improve usage and residual values • Increase alternative disposition channels - Record dispositions rep
Slide 16: 3) Operational Efficiencies
3) Operational Efficiencies • Workforce planning and rationalization • Shuttling efficiency • Shared services • Global procurement • Finance and accounting modernization Q3 2019 16
Slide 17: Third Quarter Results
Third Quarter Results
Slide 18: Total Company
Total Company ($’s in millions) Revenue $2,778 • Rental Days increased 2% driven by strong Americas $2,753 volume • Revenues of $2.8 billion were comparable to prior year, up 1% excluding currency exchange rate movements - Revenue had a $44 million negative impact from currency exchange Third Quarte
Slide 19: Americas
Americas ($’s in millions) Revenue $1,868 • Revenue grew more than 1% in the quarter $1,844 • 2% lower Revenue per Day - Partially offset by increased ancillary revenue - Digital revenue up more than 3% Third Quarter Third Quarter - Budget Truck package delivery, Zipcar Commuter, and Ride-hail 2018
Slide 20: International
International ($’s in millions) Revenue $934 $885 • Revenue decreased 1% excluding exchange rate effects - Revenue per Day was up compared to prior year - Volume reduced by 1% • Revenue decreased 5% due to a $42 million impact from Third Quarter Third Quarter currency exchange rates 2018 2019 Adjust
Slide 21: Corporate Debt Maturities
Corporate Debt Maturities • Adjusted Free Cash Flow for the year is ($’s in millions) estimated between $250 - $300 million • Net Corporate Leverage at 3.6x as of September 30, 2019, down 0.2x from $1,059 prior quarter $1,800 • $3.9 billion of liquidity as of September 30, 2019 $677 $647 $381 $400 •
Slide 22: Capital Allocation
Capital Allocation Capital Allocation From 2014 - 2019 • Seek highest returns and balanced approach for capital allocation $847 $1,185 24% 32% • In August 2019, we increased share repurchase authorization by $100 million to a total of $250 million, or 9% of $1,639 shares outstanding at the time. - W
Slide 23: 2019 Outlook
2019 Outlook
Slide 24: Key Metrics
Key Metrics ($’s in millions) Revenue $9,124 $9,000 - 9,200 (Year-over-Year change) Americas International Rental Days 1.0% - 2.0% 2.0% - 3.0% Revenue per Day 0.0% - 1.0% (1.0%) - (2.0%) Per-Unit Fleet Costs per Month (6.0%) - (8.0%) 1.0% - 2.0% 2018 2019E Guidance as of October 31, 2019 Revenue per
Slide 25: Earnings
Earnings ($’s in millions, except EPS) Full-Year Year-over-Year Change Revenues $9,000 – 9,200 - Adjusted EBITDA 750 – 800 (1%) Non-vehicle D&A 200 – 215 6% Non-vehicle Interest expense 180 – 190 (2%) Adjusted pretax income 350 – 450 1% Adjusted diluted EPS $3.35 – 4.20 3% Currency impact on revenue
Slide 26: Adjusted free cash flow
Adjusted free cash flow ($’s in millions) Full-Year Adjusted pretax income $350 – 450 Plus: Non-vehicle D&A 200 – 215 Less: Capex (230 – 250) Less: Cash taxes, vehicle programs and other (70) – (120) Adjusted free cash flow $250 – 300 Guidance as of October 31, 2019. All figures are approximate See
Slide 27: Appendix
Appendix
Slide 28: 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, a description of what they represent and a reconciliation to the most com
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Three Months Ended September 30, 2019 2018 Net income $ 189 $ 213 Provision for income taxes 139 142 Income before income taxes $ 328 $ 355 Add certain items: Restructuring and other related charges 22
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to adjusted net income (in millions, except per-share amounts): Three Months Ended September 30, 2019 2018 Net income $ 189 $ 213 Add certain items, net of tax: Restructuring and other related charges 17 3 Acquisition-related amortizat
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of Net Corporate Debt (in millions): September 30, December 31, 2019 2018 Corporate Debt $ 3,483 $ 3,551 Less: Cash and cash equivalents 615 615 Net Corporate Debt $ 2,868 $ 2,936 Q3 2019 A-4
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Last Twelve months Ended September 30, 2019 2018 Net income $ 173 $ 372 Provision for (benefit from) income taxes 103 (107) Income before income taxes $ 276 $ 265 Add certain items: Acquisition-related
Slide 33: avis budget group
avis budget group