Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q3 2015 Earnings Presentation
28 slides from Avis Budget's earnings presentation, Nov 3, 2015
Slide 1: Third Quarter 2015 Earnings Call
Third Quarter 2015 Earnings Call November 3, 2015 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (402) 220-5359 Passcode: 2995545
Slide 2: Forward-Looking Statements
FORWARD- LOOKING Statements about future results made in this presentation constitute forward-looking STATEMENTS 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 expectati
Slide 3: Ron Nelson, Chairman and Chief Executive Officer
Ron Nelson Chairman and Chief Executive Officer
Slide 4: Third Quarter 2015 Highlights
THIRD QUARTER 2015 Record Quarterly Adjusted EBITDA HIGHLIGHTS Americas and International segments both contributed to growth Stable used-car market in North America Repurchased $161 million of stock – 4% of our outstanding shares Continue to expect that 2015 will be the most profitable year in the
Slide 5: "Four Pillar" Strategy
“FOUR PILLAR” STRATEGY Four Underlying Strategies Drive Our Business Decisions Driving Sustained, Profitable Growth Company adopted this strategy in 2010 Drive Strategically Expand Our Put the Efficiency Accelerate Global Customer Throughout Growth Footprint First the Organization 5
Slide 6: Strategically Accelerate Growth
STRATEGICALLY ACCELERATE Growth in Higher-Margin Segments GROWTH Focus on areas that drive outsized profitability Significantly expanded our fleet of non-core vehicles (a) ‒ Revenue more than doubled since 2010 Ancillary revenue has increased more than 45% (a) since 2010 International-inbound Growth
Slide 7: Expand Our Global Footprint
EXPAND OUR GLOBAL Strategic Acquisitions Have FOOTPRINT Transformed Our Company October 2011 Avis Budget Group operates directly in 25 October 2012 countries and through licensees in 150 countries March 2013 We have also grown organically, with Budget volume in Europe up more than 400% since 2011 Ju
Slide 8: Put the Customer First
PUT THE CUSTOMER Continuously Provide New Products and FIRST Services to Enhance the Customer Experience Select & Go vehicle choice offering New Avis loyalty program Avis has been named Launched new voice-activated app the most admired car rental company in the Made Zipcar available on Apple Watch U
Slide 9: Drive Efficiency Throughout the Organization
DRIVE EFFICIENCY Process Improvement Drives THROUGHOUT Margin Expansion THE ORGANIZATION Rigorous cost management Performance Excellence process improvement Global process consolidation Capturing synergies from acquisitions Increased use of alternative fleet-disposition channels Initiatives Have Alr
Slide 10: Leadership Continuity
LEADERSHIP CONTINUITY Deep and Experienced Management Team Joined Avis Budget Group Ron Nelson retiring as Ron Nelson Chairman 2003 CEO at year-end Larry De Shon CEO 2006 Leadership transition effective January 1, 2016 David Wyshner President & CFO 1999 Joe Ferraro President, Americas 1979 Mark Serv
Slide 11: Larry De Shon, Chief Operating Officer
Larry De Shon Chief Operating Officer
Slide 12: Consistent Focus: Substantial Opportunities Lie Ahead
CONSISTENT FOCUS Substantial Opportunities Lie Ahead Execute against our existing strategy Fight for increased realized pricing and higher ancillary revenue and fees, with a focus on areas we can control Strive for operational excellence and provide an outstanding customer experience Generate cash a
Slide 13: David Wyshner, Chief Financial Officer
David Wyshner Senior Executive Vice President and Chief Financial Officer
Slide 14: Third Quarter 2015 Results
THIRD QUARTER 2015 RESULTS Record Revenue and Adjusted EBITDA ($ in millions) Revenue Adjusted EBITDA $2,542 $2,577 Adjusted EBITDA +1% increased 13% in $417 $431 constant currency +3% +8% excluding currency 16.4% 16.7% margin margin Third Quarter Third Quarter Third Quarter Third Quarter 2014 2015
Slide 15: Americas – Revenue
AMERICAS – REVENUE Third Quarter Volume Driven by Strong Leisure Demand Rental days increased 4% in the third quarter ‒ Pricing was unchanged in constant currency Revenues from “Signature” vehicles grew 10% International-inbound volume increased 6% (b) High-margin ancillary revenue increased 6% (a)
Slide 16: Americas – Pricing
AMERICAS – PRICING U.S. Avis and Budget Pricing Increased Fractionally Year-over-Year Pricing trends improved sequentially from the second quarter to the third Currency Other Reported (a) 0% Effects Effects Americas Pricing Adjusted EBITDA increased 4% in Avis and Budget constant currency U.S. Prici
Slide 17: International Revenue
INTERNATIONAL Revenue Increased 17% in Constant Currency (a) International Revenue Drivers Excluding Reported Currency movements Maggiore had a $134 million negative impact on Total revenue +17% +10% revenue and a $33 million negative Pricing - 3% - 1% impact on Adjusted EBITDA Ancillary revenue per
Slide 18: International Adjusted EBITDA
INTERNATIONAL Record International Adjusted EBITDA Strong summer demand across Europe ‒ Robust leisure demand, particularly in France and Italy Adjusted EBITDA increased 6% on a Majority of Adjusted EBITDA growth was organic, reported basis and and acquisitions also contributed significantly 27% in
Slide 19: Fleet Costs
FLEET COSTS Fleet Costs Have Been Better than Anticipated Monthly Per-Unit Fleet Costs (Americas) $324 (6%) $304 $310 ~$300 Americas fleet expected (3%) to be approximately 55% risk in 2015 Selling more than 40% of our risk vehicles through alternative disposition channels Third Quarter Third Quarte
Slide 20: Zipcar
ZIPCAR Zipcar Continues To Be The World’s Leading Car Sharing Network Record number of new members added in the quarter Already launched at 100 new universities this year Zipcar’s fleet totaled more than 14,000 Expanded ONE>WAY tests in Seattle, Los Angeles, cars in the third Denver and Philadelphia
Slide 21: Balance Sheet
BALANCE SHEET Strong Liquidity Position More than $4 billion of available liquidity worldwide (a) Net corporate leverage of 3.3x Year-to-date free cash flow of $456 million Quarter-end cash balance of $585 million LTM Net Corporate Leverage(a) 3.8x 3.3x Third Quarter Third Quarter 2013 2015 (a) Net
Slide 22: Capital Allocation
CAPITAL ALLOCATION Consistent Use of Free Cash Flow Our priorities for free cash flow continue to be share repurchases and tuck-in acquisitions Repurchased $161 million of stock in the third Expect to close the quarter acquisition of Avis licensee in Poland for ‒ Repurchased $277 million year-to-dat
Slide 23: 2015 Outlook
2015 OUTLOOK Narrowed Full-Year 2015 Adjusted EBITDA Projections Americas Full-year pricing projected to be largely unchanged in constant currency Currency movements impacting revenue Volume expected to grow 4% growth by 5% and Adjusted EBITDA growth Per-unit fleet costs expected to decrease 3% by $
Slide 24: 2015 Outlook: Estimates
2015 OUTLOOK 2015 Estimates (a) (b) ($ in millions, except EPS) Projection Growth vs. 2014 Expect cash taxes of $25 Revenue $8,550 1% to $50 million Adjusted EBITDA 900 – 925 4% Expect capital expenditures of no more Non-vehicle D&A 165 than $200 million Interest expense 200 Non-GAAP effective tax A
Slide 25: Summary: On Track for a Record 2015
SUMMARY On Track for a Record 2015 Expect record revenue and earnings Benefiting from better-than-expected per-unit fleet costs Strong summer demand across Europe, as anticipated Continued focus on managing costs, driving efficiency and leveraging technology Generating significant free cash flow and
Slide 26: Avis Budget Group
avis budget group
Slide 27: Glossary
GLOSSARY This presentation includes certain non-GAAP (generally accepted accounting principles) financial measures as defined under SEC rules. We have provided below reasons we present these non-GAAP financial measures, a description of what they represent and a reconciliation to the most comparable
Slide 28: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): September 30, September 30, 2013 2015 Corporate debt $ 3,384 $ 3,532 Less: Cash and cash equivalents 589 585 Net corporate debt $ 2,795 $ 2,947 Reconciliation of Adjusted EBITDA to Income before income taxes (in millions): LTM Ended LTM En