Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q2 2019 Earnings Presentation
34 slides from Avis Budget's earnings presentation, August 2019
Slide 1: Second Quarter 2019
avis budget group Second 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’re 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 m
Slide 4: Diversified Revenue Stream
Diversified Revenue Stream 35% 35% Budget Off-Airport Brand Airport 60% 65% Avis On-Airport 5% 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 Q2 2019 avis budget group
Slide 7: Global Brand Portfolio
Global Brand Portfolio Q2 2019 7
Slide 8: Innovation Initiatives
Innovation Initiatives Enhancing Mobility 1) Technology - Modernizing existing system infrastructure and next generation digital offering 2) Connected car - Creating largest global connected fleet 3) Strategic partnerships ₋ Waymo ₋ Fetch ₋ Lyft ₋ Otonomo ₋ Via ₋ Uber Q2 2019 8
Slide 9: 1) Technology
1) Technology • Implementing System Infrastructure - Backend platform enhancements for operations - Migrating to cloud to enhance speed and scale • Redesigned Avis and Budget Apps - Enhances ease of use and customer experience - Introduced split billing - Partnered with Arrive for in-app parking • Z
Slide 10: Next Generation Platform
Next Generation Platform • We have designed and are building a new mobility platform in the cloud. • Leveraging the cloud, we can lower costs, scale systems on demand, and greatly reduce our time to market. • This enables us to support innovative partnerships as well as build and accelerate the impl
Slide 11: 2) Connected Car
2) Connected Car Fuel Optimization • At the time of rental return, fuel is automatically • Reduced lost revenue and higher utilization due to fewer measured to 1/10th of a gallon monthly average missing vehicles • We are realizing well over a dollar net benefit per • Two day improvement in average r
Slide 12: Connected Car Data Monetization
Connected Car Data Monetization Opportunities • Struck inaugural partnership with Otonomo, generating revenue from anonymized data created by our connected fleet • Leverage our connected fleet to utilize vehicle data for additional margin accretive revenue streams Q2 2019 12
Slide 13: 3) Strategic Partnerships
3) Strategic Partnerships Radio Car Media Nav Phone Voice Menu A/C Vol Tune Q2 2019 13
Slide 14: Margin Expansion Initiative
Margin Expansion Initiative 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 t
Slide 15: 1) Profitable Revenue
1) Profitable Revenue • New 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 Q2 2019 15
Slide 16: 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 to improve usage and residual values • Increase alternative disposition channels - Alternate disposition sales representative of 61% of sales in th
Slide 17: 3) Operational Efficiencies
3) Operational Efficiencies • Workforce planning and rationalization • Shuttling efficiency • Shared services • Global procurement • Finance and accounting modernization Q2 2019 17
Slide 18: Second Quarter Results
Second Quarter Results
Slide 19: Total Company
Total Company ($ millions) Revenue $2,337 • Rental Days increased 2% driven by strong International $2,328 volume • Revenue increased by $9 million and Revenue per Day was $0.12 higher - Pricing up in the Americas and down in International Second Quarter Second Quarter - Revenue had a $46 million ne
Slide 20: Americas
Americas ($ millions) Revenue $1,627 • 1% growth in Revenue per Day $1,590 - Underlying leisure pricing growth for eight consecutive quarters - Direct website sales up 8% • 2% increase in volume Second Quarter Second Quarter • Revenue 2% higher in the quarter 2018 2019 Adjusted EBITDA $152 • Per-Uni
Slide 21: International
International ($ millions) Revenue $738 $710 • Revenue increased 2% excluding exchange rate effects - Revenue per Day decreased 1% - Volume grew 3% • Revenue decreased 4% after a $43 million impact from Second Quarter Second Quarter currency exchange rates 2018 2019 $100 Adjusted EBITDA $80 $71 • Pe
Slide 22: Corporate Debt Maturities
Corporate Debt Maturities ($ millions) • Adjusted Free Cash Flow for the year is estimated between $250 - $300 million • Net Corporate Leverage at 3.8x as of $1,800 $1,059 June 30, 2019 • $2.4 billion of liquidity as of June 30, 2019 $691 $659 $275 $398 $400 • No corporate debt maturities until 2023
Slide 23: Capital Allocation
Capital Allocation Capital Allocation From 2014 - 2019 • Seek balanced approach for capital allocation 1,124 840 • In August 2019, we increased share repurchase authorization by $100 million to a total of $250 million, or 9% of shares outstanding 1,578 • In Q2 2019, we entered into $16 million cappe
Slide 24: 2019 Outlook
2019 Outlook
Slide 25: Key Metrics
Key Metrics ($ millions) Revenue $9,124 $9,200 - 9,500 (Year-over-Year change) Americas International Rental Days 0.0% - 2.0% 3.0% - 6.0% Revenue per Day 0.0% - 1.5% (1.0%) - (4.0%) Per-Unit Fleet Costs per Month (3.0%) - (7.0%) 0.0% - 2.0% 2018 2019E Guidance as of August 5, 2019 Revenue per Day an
Slide 26: Earnings
Earnings ($’s in millions, except EPS) Full-Year Year-over-Year Change Revenues $9,200 – 9,500 2% Adjusted EBITDA 750 – 850 2% Non-vehicle D&A 200 – 215 6% Non-vehicle Interest expense 180 – 190 (2%) Adjusted pretax income 350 – 450 1% Adjusted diluted EPS $3.35 – 4.20 3% Currency impact on revenues
Slide 27: Adjusted free cash flow
Adjusted free cash flow ($’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 August 5, 2019. All figures are approximate See ap
Slide 28: Appendix
Appendix
Slide 29: 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 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Three Months Ended June 30, 2019 2018 Net income $ 62 $ 26 Provision for income taxes 19 12 Income before income taxes $ 81 $ 38 Add certain items: Restructuring and other related charges 23 4 Acquisit
Slide 31: 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 June 30, 2019 2018 Net income $ 62 $ 26 Add certain items, net of tax: Restructuring and other related charges 18 4 Acquisition-related amortization exp
Slide 32: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of Net Corporate Debt (in millions): June 30, June 30, 2019 2018 Corporate Debt $ 3,535 $ 3,551 Less: Cash and cash equivalents 534 615 Net Corporate Debt $ 3,001 $ 2,936 Q2 2019 A-4
Slide 33: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Last Twelve months Ended June 30, 2019 2018 Net income $ 197 $ 404 Provision for (benefit from) income taxes 106 (130) Income before income taxes $ 303 $ 274 Add certain items: Acquisition-related amor
Slide 34: avis budget group
avis budget group