Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q1 2020 Earnings Presentation
31 slides from Avis Budget's earnings presentation, May 5, 2020
Slide 1: Avis Investor Presentation
Avis Investor Presentation May 5, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Non-GAAP Financial Measures Avis Budget Group (“Avis” or ”the Company”) emphasizes that 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-
Slide 3: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 3
Slide 4: Overview and Brands
Overview and Brands • We are a leading global provider of mobility solutions with a portfolio of premium and leisure car rental and sharing brands: - More than 11,000 rental locations in ~180 countries around the world. - Zipcar is the world's leading car sharing network with more than onemillion me
Slide 5: Diversified Revenue Stream
Diversified Revenue Stream 35% 36% Budget Off-Airport Brand 57% Airport Avis 64% 8% On-Airport Other 40% Commercial 30% International Customer Segment 60% Leisure 70% Americas All numbers are approximate as of year ended December 31, 2019 Budget brand includes Budget Truck. Other brands include Zipc
Slide 6: Attractive Financial Model
Attractive Financial Model Five-Year Adjusted Free Cash Flow ($ in millions) Powerful Adjusted Free Cash Flow Data is cumulative for years 2015, 2016, 2017, 2018 and 2019 and adjusted for the adoption of ASU 2016-09 “Improvements to Employee Share-Based Payment Accounting“. 100% 25% 75% 25% Fixed Va
Slide 7: Agenda
Agenda • Company Overview • Q1 Results & Update • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 7
Slide 8: Q1 2020 Results
Q1 2020 Results Revenue & Other Metrics Revenue Adj. EBITDA ($ in millions)Reported • Revenue declined to $1.75 billion in the $1,920 $1,753 (9%) ($1) quarter, $167 million lower than prior year, driven by 7% fewer Rental Days and 1% $496 lower Revenue per Day. ($87) – Americas Revenue decreased 5%,
Slide 9: Q1 2020 Results | Americas
Q1 2020 Results | Americas Revenue & Adjusted EBITDA $ Millions Revenue Adjusted EBITDA (5%) Revenue declined to $1.25b in the quarter, a 5% or Adjusted EBITDA loss declined to $30m, driven by the $70m decrease vs prior year, driven by 5% lower abrupt impact to volume in March. Rental Days and flat
Slide 10: Q1 2020 Results | International
Q1 2020 Results | International Revenue & Adjusted EBITDA $ Millions Revenue Adjusted EBITDA (16%) Revenue declined to $496m in the quarter, 16% or Adjusted EBITDA loss of $40m was 90% or $19m lower $97m lower than prior year, including $20m in currency than prior year, including a $4m currency bene
Slide 11: Airport/Off-Airport Revenue Changes April YoY
Airport/Off-Airport Revenue Changes April YoY • The pandemic has severely impacted air travel and airport demand. This is anticipated to continue into May and will begin to recover in June and improve in the balance of the year. • Expansion into the Off-Airport market has tempered the revenue declin
Slide 12: Significant Cost Removal Actions
Significant Cost Removal Actions • We have removed an estimated $2.0 billion in annualized costs and continue to look for additional savings. • Major Actions: • People: We laid off or furloughed approximately 70% of our workforce, or ~21,000 employees. Also, we reduced VP and above compensation, fro
Slide 13: Ability to Match Fleet to Demand
Ability to Match Fleet to Demand • Unlike other travel-related industries, we have repeatedly demonstrated our ability to rapidly scale fleet to match demand. Total Company – Average Fleet vs. Rental Days 20% 10% % Change YoY 0% (10%) (20%) (30%) Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-
Slide 14: Liquidity and Cash Burn
Liquidity and Cash Burn • We are projecting an operational cash burn for the months of April, May, and June to be ~$400 million(1), ~$250 million, and ~$150 million, respectively. • We expect cash burn to sequentially improve due to aggressive cost mitigation and fleet reduction actions. • Our opera
Slide 15: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 15
Slide 16: Pro Forma Capitalization
Pro Forma Capitalization As of xEBITDA1 3/31/20 Cash and cash equivalents2 $1,400 • We have no material $1,800mm Revolving Credit Facility due 2023 - corporate debt Term Loan B due 2027 1,207 maturities until 2023 Total senior secured debt $1,207 1.7x and do not need to refinance any fleet debt 5.50
Slide 17: Liquidity Reconciliation
Liquidity Reconciliation As of 3/31/20 Proforma 3/31/20 (in USD millions) ABCR Non-consolidated ABCR Non-consolidated Subsidiary AESOP Subsidiary AESOP Cash $679 - ~$1,400 - Program Cash 39 1,005 39 - Revolver Capacity 590 - ~225 - Total Liquidity1 $1,269 - $~1,625 - • We have the ability and capaci
Slide 18: Corporate Debt Overview
Corporate Debt Overview Covenant Relief and Improved Financial Management • On April 27th, we amended our Credit Agreement providing for the suspension of our leverage maintenance covenant through June 2021 and allowing additional first lien indebtedness of $750 million, among other things. • In con
Slide 19: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 19
Slide 20: ABS Structure – One Vehicle Example
ABS Structure – One Vehicle Example 110 • Assume a vehicle is purchased for $100 and financed through our ABS structure 100 100 at 80%, or $80. Illustrative Vehicle / Debt Value (in dollars) • GAAP depreciation is ~1% per month; 90 over 18 months is ~18%, resulting in a residual value of $82. 82 80
Slide 21: Fleet Debt Overview
Fleet Debt Overview Structural Highlights • Our ABS minimum depreciation payment is 1.67% on each vehicle monthly, compared with a GAAP depreciation rate of ~1%. This equates to ~50% more cash depreciation per vehicle each month. • Our maintenance covenant requires the market value to be >=100% of t
Slide 22: U.S. Fleet Funding Example – FY 2019
U.S. Fleet Funding Example – FY 2019 • ABS term debt is consistently funded to support minimum fleet levels. • Bank conduit facilities are utilized to seasonally scale required fleet. • Required vehicle equity at peak fleet is held constant regardless of seasonality. 12,000,000 10,000,000 Vehicle De
Slide 23: Agenda
Agenda • Company Overview • Q1 Results • Liquidity and Leverage Summary • ABS Tutorial • Positioning for the Future 23
Slide 24: Capitalizing on the Recovery
Capitalizing on the Recovery • On an annualized basis, management decisions have driven an estimated $2 billion in cost savings, with further reductions in process. • These actions position us to drive higher margin as demand returns. • Exploring US and International governmental assistance programs
Slide 25: Laser-Focused on Safety
Laser-Focused on Safety • We are working tirelessly to ensure our employees and customers have a safe and convenient environment to access private transportation solutions and to stay healthy. • We have a unique opportunity to provide a safe alternative to other modes of transportation, including ri
Slide 26: Longer Term: Six Areas of Strategic Focus
Longer Term: Six Areas of Strategic Focus • Our strategic priorities remain unchanged despite the pandemic. Local Market, Ride-hail, and Alternative Disposition Customer Experience Package delivery Channels Connected Cars and International Integration Organizational Efficiencies Technology 26
Slide 27: Appendix
Appendix
Slide 28: 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 and a description of what they represent. The GAAP measures most directly
Slide 29: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net loss to Adjusted EBITDA (in millions): Three Months Ended March 31, 2020 2019 Net loss $ (158) $ (91) Benefit from income taxes (107) (45) Loss before income taxes (265) (136) Add certain items: Restructuring and other related charges 44 21 A
Slide 30: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net loss to adjusted net loss (in millions, except per share data): Three Months Ended March 31, 2020 2019 Net loss $ (158) $ (91) Add certain items, net of tax: Restructuring and other related charges 33 16 Acquisition-related amortization expen
Slide 31: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Reconciliation of net income to Adjusted EBITDA (in millions): Twelve Months Ended March 31, 2020 2019 Net income $ 235 $ 161 Provision for (benefit from) income taxes (77) 99 Income before income taxes 158 260 Add certain items: Restructuring and other related ch