Hertz Global Holdings, Inc · NASDAQ:HTZ
Hertz Global — Q3 2017 Earnings Presentation
20 slides from Hertz Global's earnings presentation, Nov 9, 2017
Slide 1: 3Q 2017 Earnings Call
1 3Q 2017 Earnings Call November 10, 2017 8:00am ET
Slide 2: Safe Harbor Statement
2 Safe Harbor Statement Certain statements made within this presentation contain forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of performance and by their nature are subject to inherent uncertaint
Slide 3: Key Metrics and Non-GAAP Measures
3 Key Metrics and Non-GAAP Measures THE FOLLOWING KEY METRICS AND NON-GAAP MEASURES WILL BE USED IN THE PRESENTATION: Adjusted corporate EBITDA Adjusted corporate EBITDA margin Adjusted pre-tax income (loss) Adjusted net income (loss) Adjusted diluted earnings (loss) per share (Adjusted diluted EPS)
Slide 4: Agenda
4 Agenda BUSINESS OVERVIEW Kathryn Marinello President & Chief Executive Officer Hertz Global Holdings, Inc. FINANCIAL RESULTS OVERVIEW Tom Kennedy Chief Financial Officer Hertz Global Holdings, Inc. 3Q
Slide 5: Progress on Track
5 Progress on Track 3Q Focus on strategic priorities beginning to pay off, evidence of right path • Rebalancing fleet capacity, car-class mix and enhancing trim packages has improved product quality • Rolling out Ultimate Choice program to 47 U.S. locations to-date has resulted in NPS improvement −
Slide 6: Quarterly Overview
6 Quarterly Overview TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 7: 3Q:17 Consolidated Results
7 3Q:17 Consolidated Results GAAP 3Q:17 Results 3Q:16 Results YoY Change Revenue $2,572M $2,542M 1% Income (loss) from continuing operations before income taxes $143M $108M 32% Net Income (loss) from continuing operations $93M $44M 111% Diluted earnings (loss) per share from continuing operations $1
Slide 8: 3Q:17 U.S. RAC Revenue Performance
8 3Q:17 U.S. RAC Revenue Performance Revenue Days Total RPD Vehicle Utilization (bps) Capacity Total RPU 0% (2%) (2%)(4%) 1% (4%) (1%) 1% (3%) 2% (1%) (60) (130)(100) 2% (2%) 3% (4%) 1% (3%) U.S. RAC (YoY quarterly results1) 1Revenue is defined as total revenue excluding ancillary retail car sales;
Slide 9: 3Q:17 U.S. RAC Vehicle Utilization
9 3Q:17 U.S. RAC Vehicle Utilization Balancing Customer Service and Fleet Availability 3Q • Total Vehicle Utilization was 81% vs. 82% 3Q:16 • Adjusting fleet planning and reservation management to support both customer service and utilization • Completing Ultimate Choice program rollout will support
Slide 10: 3Q:17 U.S. RAC Monthly Depreciation Per Unit
10 3Q:17 U.S. RAC Monthly Depreciation Per Unit $304 $321 $306 $267 $269 $303 $278 $304 Q3'16 Q4'16 Q1'17 Q2'17 Q3'17 Current Year Prior Year +19% +27% +14% +15% 3Q $348 YEAR OVER YEAR TREND IMPROVING • Lower Model Year 2017 vehicle purchase prices (like-for-like vs. MY’16) • Stabilizing residual va
Slide 11: 3Q:17 U.S. RAC Fleet Sales Initiative
11 3Q:17 U.S. RAC Fleet Sales Initiative 28% 39% 33% 3Q:173Q:16 Non-Program Vehicle Disposition Channel Mix 3Q Focused on Driving More Sales Through Alternative Channels • Used car sales through alternative channels: − 81% of mix 3Q:17 versus 72% of mix in 3Q:16 • Absolute sales through highest-retu
Slide 12: 3Q:17 U.S. Residual Value Trends
12 3Q:17 U.S. Residual Value Trends 3Q -3.0% -3.5% -3.5% -2.8% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 4Q:16 1Q:17 2Q:17 3Q:17 2017 YoY Residual Value Forecast Trend -3.8% -3.8% -3.1% -2.2% -2.5% -4.4% -2.3% 1.3% 4.4% 4.4% -5.0% -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% Jan Feb Mar Apr May Ju
Slide 13: 3Q:17 International RAC
13 3Q:17 International RAC 3Q • Revenue increased 7%, or 2% YoY excluding foreign exchange − Transaction days increased 5% − Total RPD declined 2%, driven by increase in leisure value brands • Vehicle utilization was 82%, 90 bps higher YoY as a result of improved efficiencies in fleet management • M
Slide 14: Liquidity / Balance Sheet Overview
14 LIQUIDITY / BALANCE SHEET OVERVIEW TOM KENNEDY CHIEF FINANCIAL OFFICER Hertz Global Holdings, Inc.
Slide 15: Liquidity Overview
15 Senior RCF Facility Size $1,550 Letters of Credit (786) Borrowings (120) Available under Senior RCF 644 Unrestricted Cash 748 Corporate Liquidity $1,392 Liquidity Overview Corporate Liquidity at September 30, 2017 $ in millions
Slide 16: November 2nd Debt Management Actions
16 November 2nd Debt Management Actions • Extended maturities of approximately $5.3 billion1 of global vehicle financing facilities to March 2020 • Issued unconditional redemption notice for $450 million of Senior Notes due 2019 • Amended Senior RCF to permit incremental debt capacity of up to $942
Slide 17: Maturity of Global Vehicle Financings Successfully Extended
17 Maturity of Global Vehicle Financings Successfully Extended ($ in millions) Facility Size1 Commitments Extended to 3/20201 Vehicle Debt HVF II Series 2013-A and HVF II Series 2013-B $3,415 $3,415 HFLF Series 2013-2 500 500 European Revolving Credit Facility2 274 178 European Securitization2 536 4
Slide 18: Corporate Debt Maturity Profile is Well Laddered
18 Corporate Debt Maturity Profile is Well Laddered Pro Forma September 30, 2017 Hertz Global Non-Vehicle Debt Maturity Profile1,2 1 Pro Forma for pending redemption of $450 million Senior Notes due 2019. Excludes $27 million of Promissory Notes due 2028 and $9 million of capital leases. 2 Senior RC
Slide 19: First Lien Financial Maintenance Covenant
19 First Lien Financial Maintenance Covenant Consolidated First Lien Leverage Ratio as of September 30, 2017 was 2.58x1 Our Consolidated First Lien Leverage Ratio is tested each quarter and must not exceed the thresholds outlined below: 1 TTM Adjusted Corporate EBITDA defined as $258M Reported LTM A
Slide 20: Q&A
20 Q&A
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