Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q4 2017 Earnings Presentation
20 slides from Avis Budget's earnings presentation, Feb 22, 2018
Slide 1: 2017 Fourth Quarter Earnings Call
2017 FOURTH QUARTER EARNINGS CALL February 22, 2018 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395.0021 Replay: (203) 369-3463 Passcode: 2995545
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: Highlights
HIGHLIGHTS • Long term growth initiatives progressing well: Launched our new mobility lab in Kansas City Entered into a partnership with Waymo to support their autonomous car program Implementing fully Integrated Demand-Fleet-Pricing system • Fourth quarter results reflect: Strong volume gro
Slide 4: Fourth Quarter Results
FOURTH QUARTER RESULTS Revenue Adjusted EBITDA $2,019 $140 $1,879 7% $121 16% 2016 2017 2016 2017 Reconciliation of net income (loss) to Adjusted EBITDA can be found on slide A-4 of this presentation All $ amounts in millions 4
Slide 5: Americas Fourth Quarter Revenue
AMERICAS FOURTH QUARTER REVENUE • Focused on our most profitable segments and channels Drove a 5% increase in leisure volume year-over-year, commercial volume unchanged Improved leisure pricing by 5% in the quarter, commercial pricing flat • Strong revenue growth drove 6% higher Adjusted EBITDA
Slide 6: Americas Fleet Costs
AMERICAS FLEET COSTS Monthly Per-Unit Fleet Costs Alternative Disposition Channels 50% $308 $309 0% 37% 13 ppts Fourth Quarter Fourth Quarter Full Year Full Year 2016 2017 2016 2017 Excludes U.S. Truck 6
Slide 7: International Fourth Quarter Results
INTERNATIONAL FOURTH QUARTER RESULTS • Revenue grew 12% in local currency • Robust organic leisure volume growth of 5% $4 million currency • Strong organic commercial volume increase of 10% exchange benefit to • Rate per day improved 1% in local currency Adjusted EBITDA in Q4 • Strong revenue growth
Slide 8: Strong Cash Flow and Funding Position
STRONG CASH FLOW AND FUNDING POSITION • $5.7 billion of available liquidity • Senior revolving credit facility extended to 2023 and term loan Repurchased $200 million extended to 2025 of shares in 2017 • Financial covenant amended to consolidated first lien ratio of 2.5x Adjusted EBITDA Prior Maturi
Slide 9: 2018 Adjusted Earnings Outlook
2018 ADJUSTED EARNINGS OUTLOOK Midpoint (in millions, except EPS) Full-Year Projection Growth Total Revenue $9,200 – 9,450 [3-6%] 5% Adjusted EBITDA 740 – 820 [1-10%] 6% Non-vehicle D&A 210 [4%] 4% Interest expense 200 [6%] 6% Adjusted pretax income 330 – 410 [(5%)-16%] 7% Adjusted net income 240 –
Slide 10: 2018 Adjusted Free Cash Flow Outlook
2018 ADJUSTED FREE CASH FLOW OUTLOOK Full-Year Projection (in millions) Adjusted pretax income $330 – 410 Plus: Non-vehicle D&A 210 Less: Capex (220) Less: Cash taxes (45) – (55) Plus: Vehicle programs, 30 – 50 Working capital and other Adjusted Free Cash Flow $325-375 All figures are approximate No
Slide 11: Strategic Initiatives
STRATEGIC INITIATIVES • Integrated system now live in twelve markets Demand-Fleet- • Pricing robotic launched across more than 50 European Pricing System cities • Investments in digital marketing driving strong direct Web and Mobile business, higher conversion and prepaid growth Platforms • Avis mob
Slide 12: A Year of Mobility Innovations
A YEAR OF MOBILITY INNOVATIONS • Introduction of Zipcar Flex and Zipcar Commuter products • Launched Kansas City mobility lab • Partnered with RocketSpace to advance innovations in mobility • Servicing Waymo’s autonomous vehicles in Phoenix 12
Slide 13: Summary
SUMMARY • Pricing and fleet costs in the Americas improved significantly in the quarter • Sales of risk vehicles through alternative channels increased to 50% in 2017 • Benefits from manpower and shuttling initiatives driving further benefits • Avis mobile app has been used in more than one million
Slide 14: Avis Budget Group
avis budget group
Slide 15: Appendix
APPENDIX
Slide 16: 2018 Currency Outlook
2018 CURRENCY OUTLOOK (in millions) First Second Third Fourth Full Year Quarter Quarter Quarter Quarter 2018 Revenue $55-60 $62-67 $25-30 $18-23 $160-180 Adjusted EBITDA $2-4 $14-17 $7-10 $2-4 $25-35 (net of hedging) Expect a $25 - $35 million year-over-year Adjusted EBITDA benefit Estimated ranges
Slide 17: Adjusted EBITDA Impact of a 1% Change in Driver
ADJUSTED EBITDA IMPACT OF A 1% CHANGE IN DRIVER Total Revenue per Day Rental Days Utilization Per-Unit Fleet Costs $46 $21 $19 $15 $17 $7 $6 $5 Americas International Amounts in millions Calculations are based on the last twelve months ended December 31, 2017 A-2
Slide 18: 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 19: Reconciliations of Non-GAAP Measures
RECONCILIATIONS OF NON-GAAP MEASURES Reconciliation of net income (loss) to Adjusted net income (in millions, except per-share amounts): Three Months Ended December 31, 2017 2016 Net income (loss) $ 220 $ (31) Add certain items, net of tax: Transaction-related costs, net 13 6 Acquisition-related amo
Slide 20: Reconciliations of Non-GAAP Measures
RECONCILIATIONS OF NON-GAAP MEASURES Reconciliation of net corporate debt (in millions): December 31, 2017 Corporate debt $ 3,599 Less: Cash and cash equivalents 611 Net corporate debt $ 2,988 Full-Year Ended Reconciliation of net income to Adjusted EBITDA (in millions): December 31 2017 2016 Net in