Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Debt Investor Presentation (May 2017)
25 slides from Hertz Global's debt investor presentation, May 30, 2017
Slide 1: The Hertz Corporation May 30, 2017
The Hertz Corporation May 30, 2017
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements Certain statements contained in this presentation are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements give our current expectations or forecasts of future events and our future performance and do n
Slide 3: Disclosure on Financials in Presentation
3 Disclosure on Financials in Presentation Hertz Global Holdings, Inc. (“HGH”) is the ultimate parent company of The Hertz Corporation (“Hertz”, “Company,” “we,” “us” and “our”). GAAP and non-GAAP profitability metrics for Hertz, the wholly owned operating subsidiary, are materially the same as thos
Slide 4: Business Overview
Business Overview
Slide 5: Hertz is Built on a Foundation of Strong Assets
5 Hertz is Built on a Foundation of Strong Assets... Top 10 Used Car Company in the United States Iconic Business Operating through Distinguished Hertz, Dollar & Thrifty Brands Strong Global Footprint with ~9,700 Corporate and Franchisee Locations Worldwide Stable and Profitable International RAC
Slide 6: One of three major players in the North American car rental industry
6 One of three major players in the North American car rental industry with ~$9 billion in revenue in 2016 ...That We Believe Will Drive Future Growth and Profitability… Iconic Business & Well-Recognized Brands Strong Global Footprint Stable & Profitable International RAC Segment Leading Donlen Le
Slide 7: With Int'l and Donlen Providing a Stable Earnings Base
7 …With Int’l and Donlen Providing a Stable Earnings Base… We believe we have a leading market share position in major European airports2 Highly recurring franchisee revenue of over $117 million (Q1 2017 LTM) 58%3 program vehicles for International RAC Less volatile used car market Internati
Slide 8: Successfully Navigate Industry Headwinds
8 ...and Successfully Navigate Industry Headwinds Pricing Pressures Pricing has historically responded to changes in fleet costs, but typically lags ~9 months Over-fleeting has created “high” pricing pressure environment Hertz is positioning itself to capture quality demand through investments
Slide 9: Pricing Pressures are Historically Transient and Our Fleet Strategy will Drive Long Term Revenue Quality
9 Pricing Pressures are Historically Transient and Our Fleet Strategy will Drive Long Term Revenue Quality Car rental pricing has historically been driven by fleet utilization and fleet costs, though price usually lags depreciation changes by ~9 months Rational fleeting will improve quality of r
Slide 10: Fleet Optimization To Better Align with Industry Demands
10 Fleet Optimization To Better Align with Industry Demands Aggressively sold vehicles in 1Q 2017 to right size fleet capacity, despite industry residual weakness Expect fleet optimization initiatives to be completed by end of 2Q 2017 2 490 499 490 485 161 167 169 173 170 173 164 175 821 839 823
Slide 11: Emergence of Ride Share Operators Presents Potential Growth Opportunities
11 Emergence of Ride Share Operators Presents Potential Growth Opportunities 3 Proactively established partnerships with Uber and Lyft to supply U.S. drivers with cars under specified rental agreement, turning ride-sharing into a revenue opportunity Enhancing ease and speed of rental car service
Slide 12: We Are Materially Changing Our Approach to Managing the Business
12 We Are Materially Changing Our Approach to Managing the Business… New Approach Past Practice Investment in Core Business Deferral or elimination of spending deemed to be non-critical Identify and invest in strategically important initiatives to support business objectives Get the Vehicle Righ
Slide 13: Measurable Progress is Already Being Delivered
13 … and Measurable Progress is Already Being Delivered… Opportunity Current State Vehicle Fleet Improve vehicle mix Provide competitive trim and choice Meet free upgrade performance targets Compact mix declined 400 basis points in Q1 2017 vs. Q1 2016 and was under 17% of fleet at the end of
Slide 14: Improved Cost Structure and Investments to Drive Further Cost Take-outs
14 IT Platform / Cost of Delivery • IT outsourcing • Customer relationship management system • Global fleet management system US RAC Direct Operations Expenses Back Office Optimization and General Overhead • Vehicle damage collections process • Labor productivity improvements • Improved sourcing • O
Slide 15: Hertz – Positioned for Strength and Profitable Growth
15 Significant Recent Investment Hertz’s Core Competencies Diversified Revenue and Earnings Streams Strong Global Presence and Network Iconic Global Brand Global Partnerships and Consumer Loyalty Program Vehicle Fleet Mix Information Technology and Systems Operations Brand Strategy & e-commerce Long
Slide 16: Key Credit Highlights
16 Key Credit Highlights Flexible Pro Forma Capital Structure & Attractive Maturity Profile 7 Significant Structural Protection for Notes 6 Diversified Business Mix 1 Major Player in Consolidated Rental Car Industry 2 Recent Investments are Expected to Improve Profitability 3 Limited Vulnerability &
Slide 17: Financial Overview
Financial Overview
Slide 18: Attractive Financial Attributes
18 Attractive Financial Attributes Strong Free Cash Flow Generation Largely Discretionary Non-fleet Capex Significant Tax Assets (NOLs) Resulting in Low Cash Taxes Strong Liquidity Position with No Significant Near- Term Corporate Maturities Highly Variable Cost Structure Liquid Fleet Assets with Em
Slide 19: Recent Financial Results
19 Recent Financial Results $9,236 $ 9,475 $ 9,017 $ 8,803 $ 8,736 2013 2014 2015 2016 Q1 2017 LTM $ 1,302 $ 630 $ 858 $ 553 $ 416 2013 2014 2015 2016 Q1 2017 LTM 7% 10% 5% 6% 14% $ 997 $ 299 $ 608 $ 419 $ 274 2013 2014 2015 2016 Q1 2017 LTM 3% 7% 5% 3% 11% Note: $ in millions. Charts shown represen
Slide 20: Q1 2017 U.S. RAC Performance
20 In Q1 2017, Hertz renewed ~$78mm of existing corporate portfolio at a 100% retention rate, with 19 new corporate accounts signed representing ~$8mm in incremental annual revenue Q1 2017 U.S. RAC Performance Note: Revenue is defined as total revenue excluding ancillary retail car sales. Capacity i
Slide 21: U.S. RAC Fleet Management
21 U.S. RAC Fleet Management Note: Quarterly trends reflect seasonality. Rentable Vehicle Utilization is calculated by dividing transaction days by available car days, excluding fleet unavailable for rent e.g.: recalled, out of service, and vehicle in onboarding and remarketing channels. 34% 24% 42%
Slide 22: Credit Facility Leverage and Covenant Cushion
22 ($ in millions) Additional Credit Facility Refinanced or Commitment Reductions (Pro Forma) 3/31/17 $100 Million $200 Million $300 Million Senior Facilities2 $2,395 $2,295 $2,195 $2,095 Less: Issued and Undrawn Letters of Credit (761) (761) (761) (761) Less: Unrestricted Cash (Netting Capped at $5
Slide 23: Q&A
Q&A
Slide 24: Appendix B: Supplemental Materials
Appendix B: Supplemental Materials
Slide 25: Adjusted Corporate EBITDA Reconciliation
25 Adjusted Corporate EBITDA Reconciliation Note: Amounts for the twelve months ended March 31, 2017 are calculated as the corresponding amounts for the three months ended March 31, 2017 plus the corresponding amounts for the year ended December 31, 2016 less the corresponding amounts for the three
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