Avis Budget Group, Inc. · NASDAQ:CAR
Avis Budget — Q1 2015 Earnings Presentation
25 slides from Avis Budget's earnings presentation, May 5, 2015
Slide 1: First Quarter 2015 Earnings Call
First Quarter 2015 Earnings Call May 5, 2015 Webcast: ir.avisbudgetgroup.com Dial-in: (630) 395-0021 Replay: (203) 369-1484 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: First Quarter 2015 Highlights: Solid Start to the Year
FIRST QUARTER 2015 HIGHLIGHTS Solid Start to the Year Revenue grew 4% in constant currency Avis and Budget pricing increased in the United States Capitalized on a strong used car market Expanded our global footprint organically and through acquisitions 4
Slide 5: Americas – Pricing: Positive U.S. Pricing for Avis and Budget Brands
AMERICAS – PRICING Positive U.S. Pricing for Avis and Budget Brands +1% Approximately 75% of our corporate contract (0.7%) renewals were at flat or higher rates 0% (0.6%) (0.2%) Ancillary revenue increased 7% Avis and Currency Payless Mix Other Reported (a) Weather dampened our Budget U.S. Effects E
Slide 6: Americas – Volume: Healthy Demand Environment
AMERICAS – VOLUME Healthy Demand Environment Rental days increased 5% in the first quarter ‒ Reflects organic growth and acquisition of Budget Southern California Shifted almost 150 basis points of volume to our Leisure volume increased 8% proprietary channels Commercial volume grew 1% Continuing to
Slide 7: Zipcar: Continued Zipcar Expansion
ZIPCAR Continued Zipcar Expansion Record first quarter members added Expanded to new cities and additional universities Launched in Istanbul, Zipcar’s sixth European Generating incremental benefits from fleet market sharing and infrastructure savings Continuing to pilot ONE>WAY transactions 7
Slide 8: International: Increased Constant-Currency Revenue
INTERNATIONAL Increased Constant-Currency Revenue Demand trends remain uneven Key operational accomplishments: ‒ Budget volumes in Europe grew 25% Acquired our Avis and (a) Budget licensee for ‒ Ancillary revenue per day increased 12% Norway, Sweden and Denmark ‒ Utilization improved by 40 basis poi
Slide 9: 2015 Outlook: Reiterate Full-Year Adjusted EBITDA Projections
2015 OUTLOOK Reiterate Our Full-Year 2015 Adjusted EBIDTA Projections Americas ‒ Full-year pricing projected to increase 1% to 2% in constant currency ‒ Volume expected to grow 5-7% ‒ Per-unit fleet costs expected to be flat to up 3% International volume expected to grow more than 15% ‒ Reflects acq
Slide 10: Highlights: Substantial Achievements
HIGHLIGHTS Substantial Achievements Four significant tuck-in acquisitions since October ‒ Budget licensee for Southern California ‒ Avis and Budget licensee for Scandinavia ‒ Maggiore (a) ‒ Avis and Budget licensee in Brazil Continued focus on using free cash flow for acquisitions and share repurcha
Slide 11: David Wyshner, Chief Financial Officer
David Wyshner Senior Executive Vice President and Chief Financial Officer
Slide 12: First Quarter 2015 Results: Solid Beginning to 2015
FIRST QUARTER 2015 RESULTS Solid Beginning to 2015 ($ in millions) Revenue Adjusted EBITDA First quarter earnings per share increased 6% $1,862 to $0.17, excluding (1%) $1,850 certain items $117 $117 +0% +4% excluding 6.3% 6.3% currency margin margin First Quarter First Quarter First Quarter First Q
Slide 13: First Quarter Overview: Adjusted EBITDA Walk-down
FIRST QUARTER Consistent First Quarter Adjusted EBITDA OVERVIEW Adjusted EBITDA “Walk-down” (in millions) +$17 $117 ($7) $117 ($10) First Quarter Currency Litigation Other First Quarter 2014 Effects Accrual Operating 2015 Variances, net Adjusted EBITDA Remained Unchanged Despite Several Headwinds 13
Slide 14: First Quarter 2015 Results – Americas
FIRST QUARTER 2015 RESULTS – Record Quarterly Revenue AMERICAS (a) Americas Revenue Drivers Rental Days Average Daily Rate Total Revene +5% Ancillary revenue per (b) day increased 4% Adjusted EBITDA unchanged due to $7 +3% million litigation accrual +0% Rental Days Average Total Daily Rate Revenue (
Slide 15: First Quarter 2015 Results – International
FIRST QUARTER 2015 RESULTS – Challenging Operating Environment INTERNATIONAL in Europe and Australia (a) International Revenue Drivers Total Revenue per Rental Days Day Currency Effects Total Revenue Currency movements had a $76 million +5% negative impact on Currency Total revenue 0% Effects Revenu
Slide 16: Demand – Fleet – Pricing: Roll-Out Proceeding Well
DEMAND – FLEET – Roll-Out Proceeding Well PRICING Americas Pricing robotic deployed in more than 125 U.S. and Canadian markets State-of-the-art yield-management Demand forecaster currently being rolled out initiative began in 2013 Fleet-optimization module expected to launch later this year Internat
Slide 17: Fleet Costs Better than Our Expectations
FLEET COSTS Fleet Costs Better than Our Expectations Monthly Per-Unit Fleet Costs (Americas) $310 $310 - $320 Americas fleet expected $297 (1%) $294 +0-3% to be approximately 50% risk in 2015 Selling more than 30% of our risk vehicles through alternative disposition channels Sold 82% more cars throu
Slide 18: Foreign Currency: Significant Impacts from Exchange-Rate Movements
FOREIGN CURRENCY Significant Impacts from Exchange-Rate Movements (a) Year-over-Year Effect of Currency Movements (in millions) First Second Third Fourth Full Quarter Quarter Quarter Quarter Year Revenue ($85) ($145) ($165) ($75) ($470) (b) Adjusted EBITDA $17 ($15) ($37) ($5) ($40) Currently Expect
Slide 19: Balance Sheet: Strong Liquidity Position
BALANCE SHEET Strong Liquidity Position $5 billion of available liquidity at year-end (a) Net corporate leverage of 3.3x Issued five-year fleet debt at an average rate of 2.7% Quarter-end cash balance of $854 million Issued $375 million of ten-year senior notes at a rate (before use of $400 of 5.25%
Slide 20: 2015 Outlook: 2015 Estimates
2015 OUTLOOK 2015 Estimates (a) (b) ($ in millions, except EPS) Projection Growth vs. 2014 Expect cash taxes of $50 Revenue $8,800 4% to $75 million Adjusted EBITDA 900 – 1,000 8% Expect capital expenditures of Non-vehicle D&A 165 approximately $200 million Interest expense 200 Pretax income 535 – 6
Slide 21: Capital Allocation: Uses of Free Cash Flow
CAPITAL ALLOCATION Uses of Free Cash Flow Our priorities for free cash flow continue to be tuck- in acquisitions and share repurchases Tuck-in acquisition targets remain: Purchased our Avis and ‒ Avis Budget Group licensees in or near where we Budget licensee for Scandinavia in January operate direc
Slide 22: Summary: Well-Positioned for a Record 2015
SUMMARY Well-Positioned for a Record 2015 Organic growth coupled with tuck-in acquisitions Focused on achieving higher prices and greater levels of profitability Benefiting from healthy used car market and greater use of alternative disposition channels Continued roll-out of integrated Demand–Fleet–
Slide 23: Avis Budget Group
avis budget group
Slide 24: 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 25: Glossary
GLOSSARY Reconciliation of Net Corporate Debt (in millions): June 30, September 30, December 31, March 31, 2014 2014 2014 2015 Corporate debt $ 3,388 $ 3,335 $ 3,420 $ 3,725 Less: Cash and cash equivalents 537 713 624 854 Net corporate debt $ 2,851 $ 2,622 $ 2,796 $ 2,871 Reconciliation of Adjusted